Indian Gov’t Suspends Kingfisher LicenseOctober 20th, 2012 10:55 am Associated Press
NEW DELHI (AP) — The Indian government on Saturday suspended the license of Kingfisher Airlines, which has been struggling to resume flights following a strike by pilots and engineers who have not been paid for months.
India’s Civil Aviation Minister Ajit Singh said the decision was made following concerns about the safety of passengers.
“Their planes are not being serviced, their engineers are on strike and they are not even able to give their flight schedule,” Singh told reporters.
Kingfisher, once one of India’s best airlines, is battling for a lifeline with India’s airline regulator. The company, which is drowning in debt, hasn’t operated any flights since early this month.
The Center for Asia Pacific Aviation, an airline industry research group, puts Kingfisher’s outstanding debt at $2.5 billion, including about $1.1 billion in bank debt, and says its accumulated losses swelled to $1.9 billion by the end of June.
The cash-strapped airline has stopped selling tickets on its website through Oct. 20 and was still trying to convince pilots and engineers to return to work.
Last week, a court in the southern city of Hyderabad issued an arrest warrant for Kingfisher owner Vijay Mallya on charges his airline bounced four checks worth over 103 million rupees ($1.9 million) to the consortium running the airport in the city. The money was meant to cover landing, parking and navigation fees at the airport.
Industrialist Mallya is famous for his flashy lifestyle and lavish parties attended by fashion models, Bollywood movie stars and cricket players. Mallya’s United Brewery Group is India’s largest brewer and owns other businesses in industries from chemicals to information technology. He also owns Force India, an F1 team and Royal Challengers, a cricket team. Mallya’s net worth is $1 billion, according to Forbes.
Kingfisher earlier said it would be able to engineer a turnaround and pledged to provide India’s aviation regulator with a “comprehensive plan for restoration of services after negotiations with our employees” by Oct. 20. But it failed to do so.
The company hasn’t made a profit since it was founded in 2005, according to FactSet, a financial information provider.