Sudden attachment of bank accounts caused the crisis: airline

Even as the government ruled out a bailout package for the cash-strapped Kingfisher Airlines owned by liquor baron Vijay Mallya, the private carrier on Monday blamed the Income Tax authorities for the widespread cancellation of flights.

“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,'' Kingfisher spokesperson Prakash Mirpuri said in a statement. “We are in dialogue with the tax authorities to agree upon 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 interest.''

The statement said employees' salaries can be paid and the “grounded aircraft can be recovered quicker once the bank accounts are unfrozen and the schedule is restored on priority.''

The Directorate-General of Civil Aviation (DGCA) has summoned Kingfisher CEO Sanjay Agarwal and top officials to appear before it on Tuesday to explain the large-scale disruption in operations. The airline cancelled over 30 flights on Monday, including those to Bangkok, Singapore, Kathmandu and Dhaka, leaving hundreds of passengers stranded at several airports.

About a third of its flights were cancelled in six metros on Sunday and similar disruption and delays were witnessed in smaller cities.

Civil Aviation Minister Ajit Singh ruled out offering a bailout to the airline. The first concern was that passenger safety should not be compromised in flights that were being operated. “Then we can see what reply they give. The DGCA is inquiring into it.''

Kingfisher, which suffered a loss of Rs.1,027 crore in 2010-11 and has a debt of Rs.7,057.08 crore, claimed that only about 15 per cent of its flights operating for the past three months have been cancelled.

The airline posted a Rs.444-crore loss in the third quarter this fiscal. As many as 14 flights from Mumbai, seven from Kolkata and six from Delhi were among those cancelled on Monday.