The promoter of cash-strapped Kingfisher Airlines, Mr Vijay Mallya, called on the Chairman of the Central Board of Excise and Customs, Mr S. K. Goel, late on Monday seeking operationalisation of the airlines frozen bank accounts.

The meeting comes days after the CBEC's service tax department in Mumbai froze the airlines accounts for non-payment of dues. The airline owes about Rs 110 crore till the end of November this year. During the meeting, Mr Mallya is said to have offered to pay up the dues by Tuesday.

The airline is said to have defaulted on payment of service tax despite collecting it from passengers. Generally, the airline levies a charge of Rs 155 on every domestic ticket and Rs 773 on every international ticket in economy class. Incidentally, this is the second time that the airline's accounts have been frozen. In November this year, the accounts were frozen for two days.

The airline is taking a number of steps to curtail costs, including cutting back on crew stations. The airline did not respond to written questions emailed by Business Line till late this evening on its cost-cutting exercise.

The company is struggling to meet its working capital needs and is seeking funds from a consortium of banks, which have an exposure of Rs 7,000 crore.

The airline saw its losses more than double to Rs 469 crore in the quarter ended September this year. Kingfisher had posted a loss of Rs 231 crore during the corresponding period.

During 2010-11, the airline incurred a loss of Rs 1,021 crore.

>ashphadnis@thehindu.co.in

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