India’s troubled Kingfisher cuts flights
A lone traveler makes inquiries at the Kingfisher Airlines booking counter at the city airport in Mumbai on November 11, 2011. India's debt-laden Kingfisher Airlines said on February 18, 2012, it has cancelled as many as 32 flights a day. Its net losses almost doubled in the last quarter of 2011, plunging it further into a financial crisis that threatens its survival. AFP PHOTO/INDRANIL MUKHERJEE
MUMBAI—India’s loss-making Kingfisher Airlines has cancelled as many as 32 flights a day, it said at the weekend, also admitting a glitch over tax payments in the latest signs of trouble for the carrier.
The company, which showed a third-quarter loss of $88 million last week, has been beset with difficulties caused by soaring fuel costs and high local sales taxes, as well as a domestic price war.
The airline admitted to the cancellations in a statement released late on Saturday that blamed some of the disruptions on bird strikes. It said a full daily schedule of 240 flights should return to operation over the next week.
Kingfisher also confirmed its bank accounts were “attached by tax authorities,” meaning payment of tax deducted at source had been queried by revenue officials.
“This has happened in the past. We have resolved issues before and will do so again,” the firm said, dismissing concerns about its future as “media speculation.”
Kingfisher, owned by colorful brewing magnate Vijay Mallya, has never posted a net profit since it started operating in 2005 and has seen its passenger market share slump in recent months to 12 percent.
A quarter of Kingfisher is owned by local banks and some have refused to lend the company more cash unless fresh capital is raised.
Questions about Kingfisher’s financial viability grew after it axed its low-cost Kingfisher Red service to concentrate on its full-fare business in September.
India’s airline industry – once a symbol of the country’s economic progress – is now plagued by high jet fuel prices, fierce competition, price wars and inadequate airport infrastructure, with Kingfisher one of the worst-hit firms.
