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Kingfisher Flights Cut Due to Frozen Bank Accounts

Kingfisher Airlines had to cancel a number of flights as the tax authorities froze their bank accounts, leaving them without enough cash flow to pay for the operation of their flights.  These cancelation have be going on since Saturday and on Monday the Directorate General of Civil Aviation (DGCA) had the top officials from the airline explain the cancelations.  While all of this is happening, passengers have been raging about the airline on social networking sites, blaming them for not providing more timely information about the flight cancelations.
On Saturday the airline cancelation of 32 out of 240 Kingfisher flights scheduled that day.  These cancelations were expected to happen every day for four days.  Kingfisher has said that they are currently in talks with the tax authorities to work out a payment plan so that the airline can regain access to its bank accounts and operations can return to normal.  However, the aviation minister has determined that they will not give any aid to the struggling airline and the airline has not been able to secure fresh equity capital.  The company’s debts were restructured last year, which resulted in the banks becoming owner of a quarter of shares.
Civil Aviation Minister Ajit Singh said that it is the government’s responsibility to help the national airline, Air India, but Kingfisher is privately owned and it is at the mercy of the banks.  The company is named after the most famous beer in India and it lost 4.4 billion rupees in the third quarter of 2011.  Banks will only fun the private airlines if they believe they have a sound business plan.  Five of the six big carriers in India are operating at a loss, with a total loss of $3 billion as of the end of the fiscal year in March.
See the original Google News article for more details.

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