ibnlive » Business

Oct 21, 2012 at 12:00am IST

DGCA suspends Kingfisher's licence; can the airline come up with a workable revival plan?

New Delhi: It could be the beginning of the end for Kingfisher Airlines. The crisis-hit company, under lockout since September end, had his licence suspended on Saturday by the aviation watchdog, the Directorate General of Civil Aviation (DGCA). This means an immediate halt on bookings, followed by the staff intensifying their protests for their dues.

The DGCA on Saturday said that the suspension will stay till it is convinced that the airline is fit to fly. "Safety is a major concern. The DGCA was not convinced... Therefore the suspension..." said Union Minister for Civil Aviation Ajit Singh.

ALSO SEE Kingfisher Airlines stops bookings, hopes to re-start operations soon

The DGCA crackdown came after the airline failed to respond to a showcause notice sent on October 5. What may worsen matters is the striking employees new resolve to intensify their fight to get their dues.

However, the key question is where will this leave the passengers? There will be no more bookings on Kingfisher online or over the counter. Kingfisher will have to refund money to passengers who made advance bookings. Airfares could shoot up, which is another of the grave concerns.

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Ajit Singh, however, says that the DGCA will keep a close watch on airfares. Experts, however, say that Kingfisher Airlines is lucky that their licence wasn't cancelled.

The road ahead for Kingfisher Airlines is going to be a tough one. No foreign investor will put his money into an airline plagued by strikes, is locked down and has had its licence suspended. This could very well be the beginning of the end for the company.