Kingfisher Airlines has been issued a show-cause notice as to why its licence should not be cancelled/suspended as it has failed to establish a “safe, efficient and reliable service”.

The Directorate-General of Civil Aviation, which issued the notice, has given the airline 15 days to reply. The Government statement said that legal opinion was taken before sending the notice.

The airline has suspended all operations since October 1 as employees struck work protesting non-payment of wages. The DGCA show-cause came hours after the airline sent a statement that it has pushed back its plans of resuming flights till October 12. At an October 2 meeting in Delhi, the airline’s Chief Executive Officer Sanjay Aggarwal had said that operations will resume by October 4-5.

‘Humanitarian’ Funds

The airline’s statement pushing back the start of flights came after banks agreed to release Rs 60 crore so that it can pay its employees.

Speaking to newspersons on Friday, SBI Chairman Pratip Chaudhuri said that 80 per cent of the amount released by the tax authorities will be given back to the airline by banks specifically for paying salaries.

“Of the Rs 60 crore released by the tax authorities which had impounded the money, we will release Rs 40 crore for payment of salaries looking at the humanitarian crisis that non-payment of salaries has caused. I don’t know how adequate that will be,” he said.

However, Chaudhuri ruled out giving further loans to the carrier. “There are no assets to hypothecate. So there is no room for more debt.”

The banks’ decision to release funds will come too late for at least one family of the over 4,000 employees of the airline. On Thursday, the wife of a Kingfisher staffer committed suicide blaming the financial problems that the family was facing as her husband had not been paid wages for the past five months.

Shocked at the incident, the employees in Delhi, Mumbai and Bangalore held protests. In Delhi, employees of the airline organised a candlelight rally.

Kingfisher airlines in a statement late on Friday said, "We have received a show cause notice from the DGCA which we have to reply to within 15 days."

Ashwini.phadnis@thehindu.co.in

Nivedita.ganguly@thehindu.co.in

(This article was published on October 5, 2012)
XThese are links to The Hindu Business Line suggested by Outbrain, which may or may not be relevant to the other content on this page. You can read Outbrain's privacy and cookie policy here.