Kingfisher may lose prime flying slots

 Troubled Kingfisher Airlines may risk losing a large number of its prime flying slots as it began operating a truncated flight schedule today, with DGCA considering punitive action against it for allegedly flouting regulations.

There was still no clarity on what the 13-banks consortium has decided regarding fresh fund infusion into the financially-distressed carrier.

On its part, Government adopted a wait-and-watch approach.

"If the banks find it good business, they will loan their money (to Kingfisher). .... At the same time, the government is not going to ask banks to loan money to any private industry. Its for the banks to decide ... on the basis of whether they will get it back or not," Civil Aviation Minister Ajit Singh told reporters here.

Highly-placed sources said the airline was likely to lose its flying slots as it put into operation a schedule of about 170 daily flights with 28 aircraft.

Kingfisher had earlier sought DGCA's permission for 400 daily flights with 64 planes for the winter schedule for the Ocotber-March period.

In November last year, it surrendered almost half its slots after cancelling around 200 daily flights on the same grounds of financial crisis.

The ailing carrier has now cancelled between 30-60 daily flights out of 240 since February 17 after tax authorities froze its bank accounts over unpaid service tax.
Under Rule 140(A) of the Aircraft Rules, 1937, airlines need prior approval of DGCA to curtail their flight schedules. Any violation can amount to cancellation of the flight permit of an airline, as an extreme measure.

As the Directorate General of Civil Aviation (DGCA) examined its operational details to consider punitive action, the sources said a decision on the slots is likely to be taken next week in consultation with the Airports Authority of India (AAI) which manages them.DGCA chief E K Bharat Bhushan, who had earlier expressed serious concern over the financial stress Kingfisher was under and how it affected passengers and safety, has briefed the Minister and sent a report on his discussions with the airline top brass to the Civil Aviation Ministry.

The sources said the AAI has been asked to work on the details of slots not being utilised by the airline.

The aviation regulator is examining the airline's fresh and curtailed schedule, the number of cockpit and cabin crew to operate flights as also whether it was fulfilling the Route Dispersal Guidelines.

The guidelines require that 10 per cent of an airline's flights have to be in the Northeast and other remote places.

Kingfisher's fleet has seen a drastic decline -- 64 in November to 28 now -- with several aircraft grounded for want of spare parts, some cannibalised and some others taken away by the lessors for non-payment of lease rentals.

Asked whether any punitive action would be taken against the beleaguered carrier for flouting the Aircraft Rules, the Minister said, "DGCA is considering all that. They have received some reports. Right now our priority is to see how many flights they can operate and make sure they are perfectly safe."

The airline's bank accounts have been frozen by the Central Board of Direct Taxes as it has to pay Rs 40 crore dues in indirect taxes by March 31.

The company's net loss widened to Rs 444.26 crore for the quarter ended December 31, 2011, due to high fuel costs and weaker rupee from Rs 253.69 crore in the October-December quarter in the last fiscal.

The airlines suffered a loss of Rs 1,027 crore in 2010-11 and has a debt of Rs 7,057.08 crore.