INDIA-based Kingfisher Airlines hit rock bottom yesterday with the cancellation of an additional 48 flights, bringing its current schedule to 120 flights. It is operating only 28 of its once 64-strong aircraft fleet.
Meanwhile, the reduction of seat capacity has led to a sudden rise in airfares across the board, including a Rs5,000 (US$102) increase on one-way business class fares on the Delhi-Mumbai sector. Since December, fares have gone up by 18 per cent since the fallout from Kingfisher and Air India flight cancellations.
The debt-ridden airline started its winter schedule of 418 flights last October with all 64 planes, but truncated its operations in November to 269 flights following accumulated losses due to high taxes on jet fuel and freezing of its bank accounts resulting from outstanding tax liability. Since then, several leased aircrafts have been released because of cash flow problems.
Although the airline was seeking restructuring of its debt with a consortium of Indian banks, earlier this week the banks have refused to supply more capital to the struggling carrier unless it offers more equity and pumps in sufficient funds of its own.
“If the banks find it good business, they will loan money (to Kingfisher). At the same time, the government is not going to ask banks to loan money to any private industry,” civil aviation minister, Ajit Singh, has been reported as saying. However, the Directorate General of Civil Aviation may seek punitive action against the airline for failure to adhere to its flight schedule.
To add to its woes, 30 senior pilots have quit – dissatisfied with delay in salary payments – to join IndiGo. The LCC is said to be India’s only profitable airline.
