Sanjay Aggarwal, the Chief Executive Officer (CEO) of the airline, whose financial troubles are well-known, has been asked to meet the regulator for aviation, the DGCA, tomorrow morning.
There's more bad news for the cash-strapped airline, which is owned by billionaire Vijay Mallya. Civil Aviation Minister Ajit Singh has said there will be no bailout for Kingfisher as it is a private carrier. In the past, the government has bailed out the national carrier, Air India, on repeated occasions. "Everybody knew that Kingfisher has financial problems... The government is not going to ask banks to bail out any private company. Kingfisher has presented a business plan to banks, let us see," he said.
Over the weekend, the airline cancelled nearly 50 per cent of its flights, according to some estimates. A statement from Kingfisher blamed bird-hits for grounding many of its aircraft, an explanation that has not inspired confidence among experts or passengers. Kingfisher said it expects to return in the next 2-3 days to its regular schedule of about 240 daily flights. This is the second time in four months that Kingfisher has cancelled a large number of flights without informing the Directorate General of Civil Aviation (DGCA), a violation of basic guidelines.
"We have received reports about large-scale cancellations. They are bound to inform us when they cut their schedule. But they have not done so," DGCA chief E K Bharat Bhushan said, adding, "We are gathering information from all the centres. Once we get this, we will decide what to do." Aviation rules require operators to have prior approval of the DGCA to curtail their flight schedules. Mr Bhushan said the DGCA had sent messages to all other airlines to accommodate passengers stranded due to the Kingfisher cancellations. "They have to do this without enhancing the fares," he said.
Kingfisher declared losses of 444 crores in the third quarter of this year - up from 254 crores a year ago. Kingfisher's current debt is close to 1.3 billion dollars or Rs. 7,057.08 crore. It has been lobbying hard with the government to allow foreign airlines to buy into Indian carriers, a proposal the government is now trying to push through as the country's biggest airlines show bleeding balance sheets.
Kingfisher passengers in Delhi today said information from the airline has been slow in coming; many said they landed up at the airport to learn that their flights had been cancelled. But in Mumbai, things were less chaotic than they were yesterday. There were fewer angry passengers at the airport, many having rescheduled their travel or just switched carriers.
A group of 18 banks, led by the State of Bank of India (SBI), that have lent to Kingfisher met on Friday to discuss the carrier's financial state and sources said Kingfisher hoped the banks would provide it with some working capital soon. There is no official word from either the lending banks or the airline on this yet.