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New Delhi: India’s aviation regulator yesterday suspended the operating licence of ailing Kingfisher Airlines and Civil Aviation Minister Ajit Singh warned that if the carrier fails to provide a reasonable revival plan then its licence may be cancelled.
“If they are not able to provide any concrete revival plans on how to restart operations and to pay their employees, then the DGCA (Directorate General of Civil Aviation) may cancel their licence,” Singh told reporters at his residence here.
Singh’s comments came after the DGCA suspended the airline’s operating license citing its inability to provide any reasonable revival plans.
The airline had on Friday extended till October 23 the lockout declared October 1 after negotiations with striking employees had failed.
A senior aviation ministry official said that the DGCA decided to suspend the operating licence “taking full cognizance of the reply sent by the airline”.
“The decision was taken today (Saturday) keeping in full view the present situation in which the airline has no reasonable plans to restart operations or how it will manage to pay its employees.”
The suspension came a day after the airline sought more time to reply to a showcause notice sent by the regulator on its revival plans.
“We are not satisfied with their reply. They have not come up with a solution to their industrial unrest problems and we can not wait for ever for them to come up with something,” the official added.
The regulator had issued a notice seeking a reply from the airline about its plans to restart operations and to pay the employees salaries.
It has said the airline risks suspension of its licence as it has “failed to establish a safe, efficient and reliable service”.
The regulator has also rejected the passenger carrier’s winter schedules for flight departures.
The airline last year had a departure rate of 2,930 flights per week, but has since reduced capacity due to mounting debt and an exodus of employees.
The airline had the lowest market share in September, which stood at 3.5 percent. It has a total debt of Rs70bn with banks.
The airline has only 10 operational aircraft from an earlier strength of around 66 planes a year ago. It was also the country’s second largest airlines by passenger traffic.
Much of the criticism for the airline’s decline has been directed at Vijay Mallya, the cigar-puffing billionaire who owns the company, and his flamboyant lifestyle.
But while the tycoon’s empire is not seen to be under threat, recent moves suggest he too is facing a financial crunch.
Sharan Lillaney, an aviation analyst at Mumbai’s Angel Broking, said it was unlikely the airline would be able to bounce back from the crisis any time soon.
“This (suspension) is just a formality as they were not flying anyway. Without equity infusion, it is next to impossible for the airline to come back and fly,” Lillaney said.
A pilot with the airline said the situation surrounding the company was “one big farce”.
“Employees are being blamed for the crisis, which is a shame. Did we bring the airline to this situation?” he said, declining to be named. He said the striking staff — which includes pilots and engineers — would continue to agitate to recover their long-overdue salaries.