7 March 2012 Last updated at 15:28 GMT
India's
Kingfisher Airlines has been suspended by the International Air Transport
Association's (Iata) from using its clearing house. It is used to
divide income between airlines, including multi-leg journeys. The suspension,
for failure to pay its bills, means Kingfisher will have to make direct deals
with other airlines in order to share journeys. The loss-making airline has
struggled to run a full schedule of flights as it urgently seeks additional
investment. Japan Airlines has also cancelled an agreement to allow its customers to
book part of their journey with Kingfisher. Kingfisher said
its suspension by Iata would not affect its customers. "Kingfisher
Airlines continues to operate 200 flights to 46 domestic and international
destinations. The ICH suspension does not impact our guests travelling on any
Kingfisher Airlines flight or our flight schedules," it said in a
statement.
Losses
However, the Reuters news agency has reported that
Kingfisher is currently using just 28 of its 68 planes, due to funding
difficulties. In February Kingfisher
reported a 75% increase in its losses to 4.44bn rupees ($90m; £57m) between
October and December 2011, compared with 2.54bn rupees a year earlier.
The carrier has failed to make a profit
since it was founded in 2005 by Indian beer entrepreneur Vijay Mallya. Recently it has
struggled with rising oil prices and debts of around $1.3bn. It is reportedly
seeking $400m in investment. "The future doesn't look bright," said
airline analyst John Strickland. "I would expect to see Kingfisher... to
reduce its scale of operation, possibly more than it's had to do so. It's
struggling to survive in a highly competitive and price-sensitive market."
Kingfisher Airlines pledges to 'restore
flights soon'
21 February 2012 Last updated at 09:11 GMT
India's
loss-making Kingfisher Airlines has told the aviation authorities that it hopes
to restore flight schedules in the next five to seven days. On Tuesday, the
company's top officials met aviation regulators to discuss plans to end the
large-scale flight disruptions over the past few days. At least 30 more flights were cancelled
on Tuesday and Kingfisher's shares fell by 20%. The firm recently
had its bank account frozen for non-payment of taxes. It said it was now
talking to banks to secure funding so it can continue operating. Kingfisher executives were called by the
Directorate General of Civil Aviation (DGCA) to explain why at least 130
flights were cancelled in recent days. The airline has been given until
Wednesday to come up with a revised, clear schedule for its operations,
director general of civil aviation EK Bharat Bhushan told reporters after the
meeting.
The airline, which flies on international
as well as domestic routes, is currently operating 28 of its 64 planes, he
said. It flies to 46 destinations in India and eight overseas, including
London, Hong Kong, Singapore and Dubai.
'Not an option'
Earlier, the
airline's billionaire owner Vijay Mallya said he was determined to keep the
airline flying. "Closing down is
not an option. It will not happen," Mr Mallya said. "Government does not want it to
happen. It is not in the national interest." Meanwhile, India's government
has ruled out any bailout for the carrier. "As far as private airlines
are concerned, they are talking to banks, and banks will lend them money only
if they are confident that their business plans will succeed," said Ajit
Singh, India's civil aviation minister.
The flight
disruptions are the latest problem to hit Kingfisher Airlines. Last week it
reported that its losses widened 75% in the October to December quarter,
raising fresh concerns about its future. It made a loss of 4.44bn rupees ($90m;
£57m) during the period, compared with 2.54bn rupees a year earlier.
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