Mar 082012

latest developments: • Oil companies like Hindustan Petroleum stopped jet fuel supply to Kingfisher Airlines for non-payment of dues on Wednesday evening. Seven Kingfisher flights have been delayed in Mumbai. Fuel companies reportedly stopped the supply to Kingfisher  on Wednesday. No flights To Lucknow, Bangalore and Delhi took taken off.

• Hindustan Petroleum resumed jet fuel supply to Kingfisher Airlines on Wednesday evening after hectic negotiations. It is learnt that flights were taking off with slight delays. This could bring relief to stranded passengers at Mumbai and Delhi airports. Hindustan Petroleum and other oil companies cut supply to the airline on Wednesday for non-payment of dues.

• Irate passengers created commotion at the ticket counter in Mumbai as they demanded a full refund and alternate arrangements. One passenger told  that the company promised a full refund of the ticket while another one said that he had to book an expensive ticket on another airline.

• IATA’s clearing house becomes the middleman providing what it describes on its website as “on-time settling of interline accounts between the world’s airlines, airline-associated companies and Travel Partners.” Without that assistance, Kingfisher will have to settle its bills directly with vendors –a logistical nightmare for the carrier, and an unappealing prospect for vendors, given the airline’s current financial crisis. A similar action was taken by IATA in February 2012 and suspension revoked after Kingfisher

• The International Air Transport Association (IATA) suspended Kingfisher from its clearing house due to non-payment of dues, a spokesman for the industry body of global airlines said. “Kingfisher’s participation in the IATA Clearing House (ICH) will be reinstated after the airline fulfills the ICH requirements,” a statement said.

• “Due to the accounts getting attached by the tax authorities, we were not able to make a payment to ICH which resulted in a temporary suspension. We are working with the tax authorities and expect the accounts to be un-attached shortly. As soon as this is done, we will pay our dues to IATA and get reinstated,” a Kingfisher spokesperson said.

• The spokesperson also said that 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. Our guests can continue to book with confidence either directly with Kingfisher Airlines or through their travel agents,” the spokesperson added.

• Earlier on Wednesday, Income Tax authorities in Bangalore issued show-cause notices to top officials of the airline seeking an explanation on non-payment of TDS, sources told NDTV Profit. The tax department had earlier frozen the airline’s bank accounts.

• The airline owes an additional Rs 40 crore to the Central Board of Excise and Customs, which has threatened legal action if the airline does not pay on time. The CBEC has also frozen the airline’s bank accounts.

• Kingfisher, which suffered a loss of Rs. 1,027 crore in 2010-11 and has a debt of Rs. 7,057 crore, posted a Rs 444 crore loss in the December 2011 quarter. The government has said repeatedly that it would not bailout the troubled company. Kingfisher Airlines submitted a revised schedule of its flights on February 22 based on its current flying capacity.



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