NEWS
Despite repeated warnings by the Directorate General of Civil Aviation (DGCA) to stick to its recovery plan following mass cancellations of its flights; Vijay Mallya-led Kingfisher Airlines (KFA) announced further reduction to its flight schedule on March 14. The airline which also plans to curtail international services, said that it has returned wide-body Airbus A330-200 aircraft to a lessor in Britain as part of its strategy to cut costs. It however, did not clarify which international sectors will be effected and from when. The carrier flies to eight overseas destinations including London, Dubai, Hong Kong, Singapore, Colombo, Malaysia and Kathmandu in Nepal.

VIEWS
The decision to curtail overseas operations comes as another big blow to Kingfisher Airlines which is already staring down a financial abyss from its domestic operations. However, the move did not come as a surprise in the civil aviation circles after the International Air Transport Association’s (IATA) March 7 order to its more than 30,000 affiliated travel agents across the globe to stop booking tickets for the airline over its failure to settle outstanding dues since February—a move akin to the RBI removing a commercial bank from its currency clearing system. As the order mostly affects international travel, continued operations on international routes by Kingfisher would have meant flying with mostly empty seats. If one was to go by the statement issued by the airline’s management that “we would like to confirm that we are curtailing our wide-body overseas operations that are bleeding heavily”, it would seem the curtailment pertains to some of the airline’s long-haul routes being serviced by Airbus A330-200 aircraft, such as Delhi-London or Delhi- Hong Kong, etc. But if IATA’s ‘gag order’ continues, it would be just a matter of time when the airline would be forced not only to terminate its long-haul routes but scrap in entirety its international operations. This would have a cascading effect on the airline’s already precarious financial position as earlier it’s more or less profitable international operations were helping it balance, at least to some extent, its generally loss-making domestic operations. Further, IATA’s ban would also have great repercussions on its in-country operations, as the international travellers would stop using the airline on its domestic routes as well. As a matter of fact, the airline has already started losing markedly on its share in terms of passengers carried in the domestic sector too.

The situation has reached such an impasse that the beleaguered airline is unable to maintain even its heavily truncated schedule (down to 140 from the original 400+ daily flights), it had submitted to the DGCA last month. Actually, Kingfisher appears to have been caught in a cleft stick, somewhat by its own doings. Non-payment of taxes including TDS that it had collected from its staff on their salaries finally forced the income tax authorities to freeze its bank accounts which incidentally were also the receptacles of its revenue inflows. Non-availability of funds has had an allround choking effect on the airline’s operations. It is not only the passengers but even pilots, cabin crews and ground staff who are deserting the airline in droves. At the time of writing, the airline was unable to operate even 100 flights a day.

The big question is; can the airline come out of the financial mess it has driven itself to without securing a ‘bailout’ package. The Chairman’s pleading letter to his flock to have patience and carry on with their duties, might fall on deaf ears as his own flamboyant lifestyle inspires little sense of commitment—also manifest from the fact that he continues to splurge money on his pet ‘Force India’ Formula-1 racing car project rather than paying attention to the ailing airline. Could he still be hoping for a helping hand from the government in spite of the Civil Aviation Minister Ajit Singh’s reiteration that it is not going to bailout Kingfisher or any other private airline from its financial mess?