Kingfisher blames I-T dept for flight disruptions

Beleaguered Kingfisher Airlines on Monday virtually blamed the Income Tax authorities for the large-scale flight disruptions, saying freezing of its bank accounts by them had "severely affected" payment schedules that had led to the curtailment in its services.

"The prime reason for the current disruption in our flight schedules is the sudden attachment of our bank accounts by the I-T department. This has severely affected our ability to make operational payments leading to the present curtailment," an airline spokesperson said in a statement.

It said the employees' "salaries can be paid and the grounded aircraft can be recovered quicker once the bank accounts are unfrozen and the schedule restored on priority."

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The spokesperson said the company was in talks with the I-T authorities "to agree (on) a payment plan and get the bank accounts unfrozen at the earliest. We are appealing to them to see reason that inconvenience to the travelling public is not in anybody's interests."

Kingfisher's CEO Sanjay Agarwal and top officials have been summoned by the DGCA to appear before them on Tuesday to explain the large-scale disruptions in the operations of the cash-strapped carrier.

Over 30 flights were cancelled today, including those to Bangkok, Singapore, Kathmandu and Dhaka, leaving hundreds of passengers stranded at various airports across the country.

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About one-third of its flights were cancelled in six metros yesterday and similar disruption and delays were witnessed in Tier-II and III cities.

Ruling out any bailout to the airline, Civil Aviation Minister Ajit Singh said the government had recently "seized their bank accounts also. So our first concern is that flights which are ongoing, passenger safety should not be compromised and then let us see what reply they give. DGCA is inquiring into it."

DGCA chief E K Bharat Bhushan said, "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."

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The DGCA has gathered information from all centres across the country of the cancellation and major delays of Kingfisher services. Based on this information, the aviation regulator has decided to take action under rules.

Under Rule 140(A) of the Aircraft Rules, 1937, operators require to have prior approval of DGCA to curtail their flight schedules.

Bhushan also said that messages have been sent by the DGCA to all other airlines to accommodate all passengers stranded due to these cancellations by Kingfisher.

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"They have to do this without enhancing the fares," he said when asked about the severe hardships being faced by the passengers of cancelled Kingfisher flights.

The airline has admitted to curtailment in its flight schedule, saying such a situation would continue for the next four days.

"We will operate the full schedule on our booking system within the next four days," Kingfisher spokesman had said. The reasons for cancellation given out by the carrier included bird-hits suffered by its planes.

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.

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It had also said that the I-T department had frozen its account due to non-clearance of tax dues.

"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," the Kingfisher spokesman had said.

The airline began cancelling its flights as it held talks with bankers to finalise a deal for funds. Kingfisher posted a Rs 444 crore (Rs 4.44 billion) loss for the third quarter.

The airline has suffered a loss of Rs 1,027 crore (Rs 10.27 billion) in 2010-11 and has a debt of Rs 7,057.08 crore (Rs 70.57 billion), latest figures show.