The cash-strapped Kingfisher Airlines has flown into more trouble.
On Wednesday, the airline was suspended from the International Clearing House (ICH) of the global International Air Transport Association for failing to meet its financial dues on time.
Even as the global air travel body halted sales of Kingfisher tickets by member airlines, the Airports Authority of India asked the airline to furnish corporate guarantees or face action, including stoppage of service.
Meanwhile, the airline's shares crashed by five per cent on the BSE, after rumours that the I-T Department had frozen 19 accounts of the company for non-payment of dues.
While the I-T action was not corroborated by the Department, IATA confirmed Kingfisher's suspension in a statement.
This has happened for the second time in two months for the airline. Earlier in February, it was suspended from the IATA ICH for failing to settle its dues. “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,” the airline said in a statement.
The airline has said that the ICH suspension does not impact those travelling on any Kingfisher Airlines flight or its flight schedules.
“Our guests can continue to book with confidence either directly with Kingfisher Airlines or through their travel agents,” the statement adds.
Industry sources told Business Line that the ICH suspension will make it impossible for other airlines to accept the tickets which have been issued by Kingfisher Airlines. Globally, passengers are transferred from one airline to another to reach their final destination and the airlines pay each other a fixed amount of money for the passage.
Meanwhile, the Airports Authority of India has asked Kingfisher Airlines to provide inter-corporate guarantee to continue getting services from the airport operator. The airline owes AAI more than Rs 260 crore. Kingfisher has given post-dated cheques to clear its dues but every time the cheques are presented to the banks they bounce, sources said. Airline staffers complained that they have not been paid for the past three months. Several pilots and other staff members have left the airline in recent months. With lessors repossessing aircraft, the airline fleet strength has been severely depleted. The loss of aircraft has also seen the airline curtail by almost half the number of daily flights. The DGCA recently cleared its curtailed flight schedule allowing it to operate 175 domestic and 24 international flights a day with a fleet of 28 aircraft. In another major blow, the airline has been denied aviation turbine fuel by HPCL, the country's largest supplier of jet fuel.