Kingfisher crisis deepens; no bailout - Reuters India

[Aviator]

Kingfisher crisis deepens; no bailout - Reuters India

NEW DELHI |
Mon Feb 20, 2012 7:33pm IST

NEW DELHI (Reuters) - The Directorate General of Civil Aviation (DGCA) asked Kingfisher Airlines(KING.NS) to explain why it has cancelled a large number of flights since Saturday, while the government again ruled out providing any aid to the loss-making carrier.

Kingfisher has cancelled 32 out of the 240 flights that it operates each day, the airlines said on Saturday, adding that it expected to return to full service within days.

"It is a very serious matter, we recognise it and DGCA has called Kingfisher to find out what's going on, what are their plans and why did they not anticipate the problems and inform DGCA before," Civil Aviation Minister Ajit Singh told reporters on Monday.

Kingfisher said it would submit details on the cancelled flights to the DGCA on Tuesday, and present a plan to restore all operations.

The carrier, controlled by liquor baron Vijay Mallya, said it was forced to cancel flights because tax authorities had frozen its bank accounts, hurting its ability to make operational payments.

"We are in dialogue with the tax authorities to agree a payment plan and get the bank accounts unfrozen at the earliest," it said in a statement on Monday.

The company reiterated that it has not approached the government for a "bail out."

For a graphic, click link.reuters.com/zum46s

Cash-strapped Kingfisher has so far been unable to attract fresh equity. Banks own about a quarter of its shares after the company's debt was restructured early last year.

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