Debt-ridden Kingfisher to cut its flights

City A.M. Reporter
STRUGGLING airline Kingfisher will scrap all overseas flights from this Sunday, as the Indian authorities consider stripping the company of its aviation licence.

The debt-laden carrier, run by liquor baron Vijay Mallya, has not paid staff since December and the tax authorities have frozen its bank accounts. It owes $1.3bn (£820m) to its banks. Indian aviation minister Ajit Singh said yesterday the government is awaiting a report from the air authorities before deciding whether to strip the firm of its aviation licence but added: “If passenger safety is compromised we’ll not let any airline fly. Safety norms also involves financial viability.”

Kingfisher has submitted an interim plan to operate 20 planes on between 110 and 125 domestic routes a day. The carrier’s fleet, which earlier had 64 planes, now has 47.

The company has said it is in talks with potential investors, some of which would require India to allow foreign carriers to own up to 49 per cent of Indian airlines, a change the government is considering.

Kingfisher has been trying to fend off bankruptcy for months, scaling back flights in recent months as the surging cost of fuel and higher tax have battered the firm.