Passengers booked on Kingfisher Airlines are in for some trouble as the country's third largest airline has announced that its operations will be curtailed over the next four days. On Sunday, Kingfisher Airlines cancelled 16 flights from Mumbai. Several other Kingfisher flights from Mumbai have also been delayed.
The airline has stopped its operations in Kolkata.
All these cancellations come amidst reports that the airline is going through financial trouble and one of its bank accounts has been seized by the income tax authorities. The Kingfisher management says that this is a planned move and they don't intend to shut down any of its existing operations.
However, last night there was a high level meeting where major restructuring plan of the airline was discussed. One of the options discussed in the meeting was cutting down staff or scrapping operations on non-profitable routes like Patna, Hyderabad, Lucknow, say sources.
Kingfisher's services to Singapore were also affected as its website
showed there were no flights available for the next ten days.
At least five flights from Delhi, including three to Pune, and another six flights from Mumbai were cancelled on Saturday.
Maintaining that most of the stranded passengers at various airports were accommodated in other airlines, airport sources on Saturday said over 30 Kingfisher aircraft were grounded. The airline was operating only about 160-180 flights out of its already curtailed winter schedule of 240.
The sources said operations from Tier-II and Tier-III cities are likely to be affected until March-end.
The staffers, particularly those on contract, wanted the airline to clear salary dues and later walked out en masse, leaving passengers in the lurch.
Kingfisher owes an estimated Rs 1,500 crore to SBI, about Rs 400 crore each to Corporation Bank and Bank of Baroda and Rs 380 crore to Federal Bank, among other lenders.
SBI had last month said it would be difficult for lenders to provide more funds, unless Kingfisher pays Rs 100 crore to restore a bank guarantee invoked after the carrier failed to repay its loans or makes good the default.
On Friday, auditors of Kingfisher Airlines had raised concern over its ability to stay afloat and said it would need to inject more money to remain a "going concern".
'Going concern' means that the firm in question would not go broke or be liquidated and remain operationally afloat in the foreseeable future.
In a quarterly report, owner Vijay Mallya said that the latest financial statement had been based on the premise that "the company is a going concern", but conceded that "the company has incurred substantial losses and its net worth has been eroded".
Barely two days after posting a Rs 444 crore loss for the third quarter, the airline began cancelling its flights as it held talks with bankers to finalise a deal for funds.
Kingfisher has suffered a loss of Rs 1,027 crore in 2010-11 and has a debt of Rs 7,057.08 crore, latest figures show. Lenders of Kingfisher had last night failed to finalise a deal for providing additional funds to the company at a six-hour long meeting, after which Kingfisher Chairman Vijay Mallya described it as a "long, good and comprehensive" meet.
The 18 banker's consortium -- including SBI, Bank of Baroda and Corporation Bank -- are likely to meet again to decide on additional funding to the debt-laden airline.
Iqbal Mulla, President of the Travel Agents Association of India (TAAI), told PTI that "as the customer is important for us, we are asking them to be cautious when they come for booking on Kingfisher."
However, he said the airline was "important for India and we extend our support to them in the turbulent times."
A senior officer of a major travel portal, requesting anonymity, said there was no official intimation from the airline but on checking, its officials said they were suspending flights to Kolkata for a limited period.
Another travel company director said there had been a large number of cancellations in the recent past from Amritsar and Varanasi too. There were reports about flight disruptions from Lucknow, Bhubaneswar, Patna and Srinagar as well.
A third travel company official said though the Kingfisher website was technically showing flight availability on its global distribution system, it seems flight tickets were not actually available for sale. This situation was prevalent on the booking system till March end, he added.
Late on Saturday night, a spokesperson of Kingfisher Airlines admitted that there had been flight disruptions and said these will continue for the next four days.
"Admittedly there have been flight disruptions since yesterday which will continue for four days due to unexpected events including bird strikes which rendered aircraft out of service," the spokesperson said.
He added that were no plans by the airlines to shut down any station.
"We would like to categorically state that we have not shut any stations nor do we have any intention of doing so."
The spokesperson also admitted that I-T authorities had attached the airlines' bank accounts, but claimed that such a step was also taken in the case of Air India.
"We confirm that our bank accounts were attached by the tax authorities. However, this has happened in the past not just to us but also to Air India. We have resolved issues before and will do so again," he said.
The spokesperson added that the airlines will operate the full schedule on its booking system within the next four days.
(With PTI inputs)