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Feb 20, 2012 at 10:52pm IST

Talking to I-T Dept to resolve crisis: Kingfisher

New Delhi: Kingfisher Airlines on Monday said that the freezing of its bank accounts by the Income Tax authorities had 'severely affected' payment schedules that had led to the curtailment in its services. "The prime reason for the current disruption in our flight schedules is the sudden attachment of our bank accounts by the I-T department. This has severely affected our ability to make operational payments leading to the present curtailment," an airline spokesperson said in a statement.

It said the employees' "salaries can be paid and the grounded aircraft can be recovered quicker once the bank accounts are unfrozen and the schedule restored on priority."

The spokesperson said the company was in talks with the I-T authorities "to agree (on) a payment plan and get the bank accounts unfrozen at the earliest. "We are appealing to them to see reason that inconvenience to the travelling public is not in anybody's interests," he said.

Talking to I-T Dept to resolve crisis: Kingfisher

Kingfisher Airlines on Monday virtually blamed the I-T authorities for the flight disruptions.

Kingfisher's CEO Sanjay Agarwal and top officials have been summoned by the DGCA to appear before them on Tuesday to explain the large-scale disruptions in the operations of the cash-strapped carrier.

Kingfisher Airlines earlier claimed that it will give the salaries to its employees in a week's time, blaming "some large unexpected payments" for the delay in salary disbursement. The chief executive of the airlines also hinted that the disruption of flights operations will continue for one more week.

In a message to the employees of Kingfisher Airlines, Sanjay Aggarwal said, "We got hit by some large unexpected payments which had to be addressed on an emergency basis. It will take us another week before we complete the salary disbursements."

"For some of you working at the airports, we have arranged a cash advance of Rs 5000," added Aggarwal.

This attempt by the KFA to reach out to its employees has come after half of its senior pilots quit in the last three months and other employees did not receive their salaries for nearly three months. The pick-and-drop facilities for the employees were also stopped.

Meanwhile, sources have said that the Directorate General of Civil Aviation (DGCA) is mulling action against Kingfisher as the airline continues to cancel flights across the country. It has summoned Kingfisher Airlines CEO Sanjay Aggarwal to appear before the aviation regulator on Tuesday over the cancellations of flights "without any information".

Kingfisher on Monday cancelled 30 more flights in Mumbai and Bangalore while it rescheduled two others. Kingfisher operations at the Kolkata airport were also shut till March 3.

The move by the airlines came a day after it cancelled around 30 flights, leaving passengers stranded without any prior information.

According to sources, Kingfisher is operating just 16 of the 64 aircraft at present.

Talking about the crisis, Union Civil Aviation Minister Ajit Singh has said that the government cannot give a bailout to private airlines, however, the banks can give money to the airlines under RBI norms.

He said, "Everyone knew about Kingfisher's financial problems. Our first concern is passengers' safety, which should not be compromised. DGCA is looking into it."

Referring to the strike by the Kingfisher employees, the minister said, "Kingfisher has not given salaries to their staff and that is why there is a strike."

The series of flight cancellations have landed Kingfisher airlines in trouble with the DGCA, which has initiated an inquiry, asking for a full report.

"We have received reports about large-scale cancellations. They are bound to inform when they cut their schedule, but they have not done so," said DGCA chief Bharat Bhushan.

He further said that all other airlines had been asked to accommodate all passengers stranded due to cancellations by Kingfisher.

Bhushan said, "They have to do this without enhancing the fares."

The DGCA is, however, yet to receive a reply from Kingfisher and the airline may even face cancellation of its licence.

The cash strapped airline has been cancelling flights without even informing the travelers and this has prompted the DGCA to initiate an enquiry.

According to sources, the top aviation regulator has asked for a full report, maintaining that cancelling scheduled flights without informing the regulator is a clear violation of rules.

Even while the termination of Kingfisher's license is possible if the situation deteriorates further, the airline has expressed hopes that situation will soon be under control.

"We are not going to pull out operations from any base and about 10 aircraft will be back in service soon. We are in talks with investors and the airline will soon get recapitalized," said CEO Sanjay Aggarwal.

The Kingfisher Airlines is already crippled after tax authorities attached its bank accounts over non-payment of dues last week. Unpaid employees also went on a flash strike in Kolkata. Services in other metros and tier 2 cities have been hit as well.

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