M A I N   N E W S

Kingfisher Airlines loses flying permit
But says no ‘cause for concern’
Tribune News Service

The airline said there was no “cause for concern” as the rules allowed for renewal of a permit within two years of its expiry. “Despite the impending expiry of its licence tonight (Monday), there is no cause for concern as the regulations permit licence renewal within two years of expiry. Kingfisher Airlines is confident of securing approval from the DGCA on the restart plan, licence approval and reinstatement of its AOP,” it said. However, with every passing day it would become more and more difficult for the airline to resume operations again. Plagued by high ATF costs, fierce competition and price wars, Kingfisher owes money to almost everyone in the business - banks, airports, fuel suppliers and staff. Even though it has been looking for a foreign investor, the attempts have proved unsuccessful.

Though the management claims that they are in talks with foreign investors, including Abu Dhabi-based Etihad Airways, experts are sceptical. They say there is no reason why any investor would take up huge liabilities without any visible gains. The lapse of the licence would be a blow to its employees, who are yet to receive salaries for many months.

While licences can always be renewed (in the Kingfisher case, it has two years to seek a renewal), it will only become more difficult with each passing day. The airline’s liabilities will rise as interest costs on loans increase. Even if it manages to fly, it would be tough to win back passengers’ faith and match fare cuts with fierce competitors who would not want the status quo to be disturbed in extremely tough economic conditions. In any case, flying again will only bring in more losses for the debt-laden Kingfisher, the experts say.