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DGCA issues show-cause notice to Kingfisher
Girja Shankar Kaura/TNS

New Delhi, October 5
A day after the wife of a Kingfisher Airline (KFA) employee committed suicide due to the hardship being faced by the family in the wake of the airline not paying salaries, the Director General of Civil Aviation (DGCA) has issued a show-cause notice to the debt-ridden aviation company seeking to suspend or cancel its licence.

Reports emerging from the Civil Aviation Ministry said that the DGCA issued the show-cause notice to the KFA late in the evening asking why its flying licence should not be suspended or cancelled.

The notice from the DGCA apparently came after the sector regulator sought legal opinion on issuing of such a notice and got a positive response from the Law Ministry.

An official statement released by the ministry said the KFA has been given 15 days to reply to the notice. The show-cause notice on why its permit should not be cancelled or suspended has been issued under the provisions of Section 15(2)(b) of Schedule XI of the Aircraft Rules 1937 as the Airline has failed to establish a safe, efficient and reliable service.

The operations of the KFA are under suspension since September 30 due to strike by its employees who have not been paid salaries for months.

The official statement further said Civil Aviation Minister Ajit Singh while taking a strong note of the situation has said that there will be no compromise on safety of aircraft operations.

"The government has also taken legal opinion in this regard. As per Section 15(2)(b) of Schedule XI of the Aircraft Rules 1937, the DGCA may cancel or suspend permit of an Airline for such period as he thinks fit, if he is satisfied that the holder of the permit has failed to establish a safe, efficient and reliable service," the statement said.

Earlier, Director General, Civil Aviation, Arun Mishra had called up the CEO of the airlines on October 2 had asked him to submit an operational plan of the Airline. In the meeting the DGCA also asked the airline to show their operational preparedness, before DGCA could allow recommencement of its operations.

The CEO of the airline had assured to resume operations by October 4 or 5 but the Airline has not been able to resolve its issues.

"They have not approached DGCA with any operational plan. DGCA reviewed the current situation of the Airline today and decided to issue the show cause notice to the Airline under Section 15(3) of Schedule XI of the Aircraft Rules 1937," the statement further said.

Last night, the airlines extended its partial lockout by a week till October 12 as talks between its management and employees failed to break the deadlock over non-payment of salaries for the last seven months.

Countrywide protests were staged by the airline employees after CEO Sanjay Agarwal cancelled a meeting with them.

The notice from DGCA came after Ajit Singh today said the debt-ridden company will have to satisfy airline regulator DGCA on safety before it gets permission to fly again.

Ajit Singh said that it's not just the finances, but also the contentment of the employees of Kingfisher that they will consider before allowing the airline to function.

"There are a lot of factors involved in it. That includes the salaries of the employees, their disgruntlement issues and others. If the employees are disgruntled there is an issue of safety."

"In order to give them permission to fly, they have to satisfy the DGCA on all these issues. The rest is if the law allows or…if we want to suspend their licence or revoke it, we have to see if the law permits," Singh told reporters.

Reports said that airline will not be able to pay the full salaries to its employees. The current monthly salary outgo for Kingfisher Airlines stands at approximately Rs 20 crore. Half of the airline staff was paid their March salaries, but for the outstanding salaries, the airline will need Rs 10 crore.

Striking engineers and pilots have rejected the airline management's offer of one month salary dues in the next few days and remaining amount once the airline is re-capitalised.

The airline owned by the flamboyant Vijay Mallya has been saddled with a huge loss of Rs 8,000 crore and a debt burden of another over Rs 7,000 crore, a large part of which it has not serviced since January.

Several of its aircraft have been either taken away by its lessors or grounded by the Airports Authority of India for non-payment of dues during the past few months.