DGCA issues notice to Kingfisher Airlines

Last Updated: Fri, Oct 05, 2012 15:07 hrs

New Delhi: The aviation regulator Friday issued a show-cause notice to debt-ridden Kingfisher Airlines (KFA) asking it to reply within 15 days as to why its flying permit should not be cancelled or suspended.

The Civil Aviation ministry in a statement said the Directorate General of Civil Aviation (DGCA) issued the notice "as the airline has failed to establish a safe, efficient and reliable service".

The operations of the airline are under suspension since Sep 30 due to a strike by its employees, who are demanding payment of their slary and other dues.

Civil Aviation Minister Ajit Singh has said that there will be no compromise on safety of aircraft operations, the statement said, adding that the government has also taken legal opinion in this regard.

As per Section 15(2)(b) of Schedule XI of the Aircraft Rules 1937, DGCA may cancel or suspend permit of an airline for such period if it is satisfied that the holder of the permit has failed to establish a safe, efficient and reliable service.

Earlier Arun Mishra, director general of civil aviation, had called the chief executive officer of the airline Oct 2 and had asked him to submit an operational plan of the airline.

Late Thursday night, the airline said it was extending to Oct 12 the lockout declared Oct 1 after negotiations with the striking employees failed amid reports that airline is not in a position to pay the full salaries to its employees since the lenders have refused fresh funding.

Earlier in the day, the minister had said the carrier will not be allowed to fly if it fails to satisfy mandatory safety norms.

"In order to give them (Kingfisher Airlines) permission to fly again, they have to satisfy the DGCA (Directorate-General of Civil Aviation) on all safety issues and get all their employees back," Singh told IANS.

Agitated employees, including pilots, engineers and technicians took out a procession Friday morning to the airline's office in Mumbai, demanding that their pending salaries and other dues be immediately paid.

"We are making three demands - salary, salary, salary. Everything will be normal as soon as the management clears our pending dues since we are not able to run our households," a pilot taking part in the procession told IANS.

On Thursday, an airline staffer's wife committed suicide in New Delhi, citing economic woes.

The situation at the airline has not improved even after the regulator hauled it up after it cancelled all 50 flights Monday as employees went on strike Sunday, demanding payment by Oct 5 of their salaries, pending since March.

Key personnel like aircraft maintenance engineers, whose aircraft airworthiness clearance is mandatory for any flight to take off, also struck work.

The airline has a total debt of Rs.7,000 crore from a consortium of 17 banks, of which SBI has an exposure of Rs.1,400 crore. If the airline goes bust, these lenders would be the biggest losers.

The company's scrip at the Bombay Stock Exchange (BSE) fell by 4.68 percent and stood at Rs.13.25 Friday from its previous close at Rs.13.90.

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