MARKET UPDATE
| Kingfisher wings could be clipped Sat, 06 Oct 2012 00:58:00 +0530 |
| Business Standard Economy Policy News Further tightening the noose around the ailing Kingfisher Airlines (KFA), the civil aviation ministry on Friday slapped a showcause notice on the airline, asking it why its licence should not be cancelled. The airline confirmed the development, saying: “We have received a showcause notice from the DGCA which we have to reply to within 15 days. We will send a detailed response to the DGCA well in time.We will also submit a comprehensive plan for restoration of services after negotiations with our employees.” Yesterday, after the talks with employees on their coming back to work failed, the beleaguered airline had extended the deadline to lift the partial lockout to October 12. The move came a few hours after Civil Aviation Minister Ajit Singh said his ministry would take a tough stance against the carrier: “The (Kingfisher) management has declared a lockout. DGCA (Directorate General of Civil Aviation) is looking into legal issues and intends to issue a showcause notice on suspension or cancellation of licence. He (DGCA chief) intends to go ahead with the notice.” Singh added the non-payment of salary by the airline had not directly impacted the safety until some time back. “But, with the engineers on strike and no air-worthiness certificate for the flights, the safety is directly compromised and this is in breach of the regulations.” However, experts say the airline has breached the DGCA regulations on many counts. A former DGCA chief says KFA had cleared a schedule to run its summer schedule with 20 aircraft and 120 flights a day, but it reduced its flights to nearly half the number and operated only 10 aircraft, without taking any clearance from DGCA. Based on this, DGCA can impose a suspension order on the airline, citing schedules not being maintained. Also, DGCA can cancel an airline’s permit to fly on the ground that “its operating capability” has deteriorated. This is the case with KFA. After the airline replies, an internal investigation would be undertaken by the ministry to examine if its reply is satisfactory. Based on that, the future course of action would be decided. The action started after Director-General of Civil Aviation Arun Mishra gave KFA an ultimatum that it give a timeline for paying its employees, besides furnishing a “satisfactory and realistic” operational preparedness plan, before it could get permission to fly again. |
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