Tuesday, 9 October 2012

India Aviation Regulator DGCA Orders Kingfisher Airlines to Stop Selling Tickets


India's aviation regulator Tuesday asked Kingfisher Airlines Ltd. to stop selling tickets, soon after the cash-strapped carrier resumed bookings for flights starting this weekend.




Civil Aviation Minister Ajit Singh said Kingfisher won't be allowed to sell tickets until the Directorate General of Civil Aviation is satisfied with the carrier's plans on carrying on operations.

"They are not going to start flying again unless they have got the DGCA's permission" and the regulator is convinced about the airline's safety and financial stability, Mr. Singh said on the sidelines of a conference.

The minister's comments came after Kingfisher resumed selling tickets on its Web site and also through travel portals MakeMyTrip.com., Cleartrip.com and Ixigo.com.

Early last week, the airline--controlled by liquor mogul Vijay Mallya--suspended ticket sales and flight operations after pilots, technicians and engineers went on strike to protest against non-payment of salaries since March.

Concerned about the strike, especially by engineers who certify aircraft before flying, the regulator served Kingfisher a notice Friday, asking it to state by Oct. 20 why it believes its license shouldn't be cancelled.

A message on the airline's Web site says its flights will be subject to regulatory approval, but it didn't say how it will resume flights if its employees don't end their strike.

A spokesman for Kingfisher didn't respond to phone calls.

MakeMyTrip.com and Cleartrip.com stopped selling Kingfisher tickets later in the day. But ticket sales on the airline's Web site and through Ixigo.com are continuing.

In an emailed statement to Dow Jones Newswires Tuesday, MakeMyTrip Ltd. said it stopped ticket sales following the regulator's "comments on the operations and subsequent uncertainty on flights."

An executive at Cleartrip.com declined to comment, while executives at Ixigo.com couldn't be contacted.

Other travel companies have refrained from selling the airline's tickets. Yatra.com's Web site, for instance, showed the portal is "not displaying Kingfisher flights due to uncertainty of their operations."

Late Monday, Keyur Joshi, co-founder and group chief operating officer of MakeMyTrip, said the portal refunded passengers 600 million rupees to 700 million rupees ($11.5 million to $13.4 million) a day last week because of Kingfisher suspending its flights.

Kingfisher--named after India's highest-selling brand of beer--hasn't posted a net profit since it began operations in May 2005 and has $1.5 billion in debt. It owes millions of dollars to aircraft-leasing companies, suppliers, oil companies and to the government in taxes.

Financial woes have forced the airline to cut operations to less than a fourth of its 400-flights-a-day schedule last year. Before it suspended flights last week, it operated 12 planes, down from 64 last year. It is now India's smallest carrier by market share, down from its second-biggest a year earlier.

Tuesday, shares of Kingfisher fell 5% to 12 rupees on the Bombay Stock Exchange, where the benchmark index rose 0.5%.

The company's shares have fallen by 5%, the daily trading limit set for Kingfisher, in each of the past seven sessions.

The shares have lost much of the gains they made since Sept. 14, when the Indian government announced it would allow foreign airlines to buy stakes of up to 49% in Indian carriers.

Kingfisher had lost 69% of its market value in 2011 and a further 49% between Jan. 2 and Sept. 14 this year.



Shekhar Gupta
CEO
Capt. Shekhar Gupta [ Pilot, DIAM, M.Ae.S.I., MAOPA [USA] ]
shekhar@aerosoft.in 
Blog : http://shekharaerosoft.blogspot.in/ 
http://aerosoftseo.com/team/shekhar/



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