DGCA suspends Kingfisher's license

Beleaguered Kingfisher Airlines' license was on Saturday suspended by regulator DGCA, capping three weeks of the carrier's lockout and its failure to come up with a viable plan of financial and operational revivial.

The Directorate General of Civil Aviation (DGCA) has suspended the Scheduled Operator Permit of Kingfisher Airlines till further orders, Civil Aviation Ministry officials said.

Suspension of flying licence implies an immediate halt to all bookings on the entire Kingfisher network as well as through travel agents, the officials said.

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The liquor baron Vijay Mallya-owned carrier has been saddled with a loss of Rs 8,000 crore and a debt burden of another over Rs 7,524 crore, a large part of which it has not serviced since January.

The airline currently has only 10 operational aircraft compared to 66 a year ago.

Asked why the license was suspended, the officials said the government did not want a situation where the airline, which was on cash-and-carry mode for almost all service providers, re-starts operations and then keeps flying in fits and starts, as has been happening since last year-end.

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The airline, under a lockout since October one and resultant suspension of entire operations, had on Friday sought more time to respond to the DGCA's show-cause
notice but did not give any timeline by which it would do so.

The lockout was extended by three days to October 23. The DGCA had issued the show-cause notice on October 5 to the crisis-ridden carrier asking why its flying licence should not be suspended or cancelled as it was not adhering to its flight schedule and "abruptly cancelling its flights time and again during the last 10 months", causing great inconvenience to the travelling public.

The aviation regulator had given the airline 15 days to respond, the deadline for which expired today.

The airline has suffered losses of Rs 1,609 crore in 2008-09, Rs 1,647 crore in 2009-10, Rs 1,027 crore in 2010-11 and Rs 732 crore in 2011-12.

Elaborating on the suspension of licence, the Civil Aviation Ministry officials said the flying permit was suspended under the Civil Aviation Rules and provisions of the Aircraft Act.

The permit would remain suspended till such time that Kingfisher submits "a concrete and reliable plan" to relaunch its scheduled operation "to the satisfaction of the DGCA".

They said the letter, written by the airline's Executive Vice President Hitesh Patel, was "not found satisfactory" as it sought more time to respond to the show cause notice without giving any time-frame.

The letter also did not provide any clear operational plan, how and by when the airline would get recapitalised or even a timeline for payment of seven months salary dues to its employees, the officials said.

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For resumption of operations, the airline would have to approach DGCA saying they were ready to resume operations.

The regulator then would have to satisfy itself that the airline was fully prepared to fly, including preparedness of its staff to operate flights, the airline's capacity to pay for the operations and all safety measures, before giving a go-ahead.

Kingfisher was issued an airline licence on August 26, 2003. It was actually issued to Air Deccan which was bought over by Kingfisher. It is valid till December 31 this year.

The airline, which had submitted its operational plans for the winter schedule starting October 28, was "not approved" by the DGCA earlier this week.However, its flying slots are not likely to be given away to other airlines as "there are no takers", with most airlines reducing their capacity even during the peak winter season.

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In a statement to the media on Thursday, the airline had expressed hope that it would resume operations by November six, "subject to our resumption plan being reviewed and approved by the DGCA.

In the backdrop of suspension of licence, Kingfisher employees are slated to meet the management on Monday to resolve the impasse over salary payments and resumption of flights.

Airline engineers, who started the present crisis by going on strike from September 29 and refusing to certify planes, said unless Kingfisher offers them at least four months' salary and that too before Diwali on November 12, they would not resume work.

They were joined in a day by the pilots, which led the company to declare a lockout on October one. It kept on extending the lockout, which is now on till October 23.

On receipt of the letter from Kingfisher last afternoon, the DGCA consulted legal experts on what action – suspension or cancellation of flying licence -- could be taken against it for failing to resolve the impasse that entered 22nd day.

The airline would not be able to resume operations till the DGCA gives the final clearance.