KF woes continue, no succour from banks

One-time high-flier Kingfisher Airline may lose its predominance, including high-premium sectors, with the civil aviation ministry reportedly asking the Airports Authority of India (AAI) to consider the depleted schedule of flights submitted by the debt-stricken airline on Wednesday.

Following a deadline set by aviation regulator Directorate General of Civil Aviation, the cash-strapped airline submitted that it would fly only 28 of its 64 aircraft and operate about 175 schedules.

This meant that the airline had withdrawn nearly 225 schedules out of the 400 it had submitted for the 2012-13 winter season.

This spells a bleak future for the airline as it may lose its predominance on scores of slots which may now be allocated to other airlines.

Many of them are lucrative routes such as Delhi-Mumbai, Delhi-Bangalore and Bangalore-Mumbai.

The airline would lose prime slots too, of operating to key destinations during high-demand peak hours.

Public sector AAI, which manages the schedules, is likely to submit its report next week. The Authority revises airline schedules twice a year - in October and April to fit in winter and summer operations.

The decision to ask AAI to study the schedules came after DGCA chief E K Bharat Bhushan met Civil Aviation Minister Ajit Singh Wednesday and also sent a report on his discussions with the airline top brass to the ministry.

No reprieve

On a day when it began operating the revised schedule, the Vijay Mallya-led airline was understood to have begun discussions with the Income Tax Department on lifting the freeze on the carrier’s bank accounts.

The carrier is said to have paid Rs 21 crore out of I-T dues of over Rs 300 crore on Monday and wants its attached accounts to be defreezed.

As for the banks coming to the aid of the airline, there was no headway on Thursday. UCO Bank Chairman and Managing Director Arun Kaul was quoted as saying, "the bank has declared Kingfisher account as NPA...We would like this account to be regularised if any further request (for loan) is to be entertained.”

He added, "there is no decision as yet (on providing fresh loans)." Ajit Singh ruled out grounding the airline because of cancellation of flights.

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

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

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