Kingfisher Airline summoned by DGCA

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DGCA summons KF CEO, says passengers first

The Directorate-General of Civil Aviation (DGCA) summoned the CEO of Kingfisher Airlines, Sanjay Aggarwal, and ordered the airline to accomodate passengers, affected by cancelled flights, with other airlines.

DGCA summons KF CEO, says passengers first

The DGCA response came after Kingfisher cancelled 17 flights on Monday, for a third day in a row, from Bangalore and Mumbai and also rescheduled two flights. The airlines had also cancelled 28 flights on Sunday, February 19.

Meanwhile, Civil Aviation Minister Ajit Singh said in response to the crisis that there were no plans to bail out the troubled airline. The airline must talk to the banks and sort the issue out, he added.

Earlier, Kingfisher Airlines (KFA) officials, despite repeated attempts, declined to confirm or deny the developments. Instead, they repeatedly said that “we shall issue a statement when required” and refused to comment on the potential action by the DGCA.

The cancellations have affected incoming or outbound flights in Mumbai, New Delhi, Chennai and Bangalore.

The abrupt flight cancellations had created major problems for passengers waiting to travel after having booked their tickets months in advance, an official at the Chhatrapati Shivaji International Airport said.

However, Sunday, the beleaguered carrier reeling under financial losses had claimed that despite flight disruptions since the past couple of days, it has not shut down any stations from its schedules, an official said.

The developments have also worried passengers intending to travel on KFA flights in the next few days or weeks.

“Last minute cancellations jeopardize our travel and onward plans, while other carriers charge heavily for the same sector if we try to cancel and make alternate bookings,” said A.A. Kinariwalla, a manager with a multinational in Mumbai, who is a frequent flier on domestic and international sectors.

A KFA spokesperson blamed the flight disruptions on certain unexpected incidents like ‘bird hits’ which rendered its aircraft out of service.

The flight disruptions are expected to continue for another three to four days with only 208 flights in operations, but the carrier has not shut down nor does it plan to close down any stations, the official said.

‘The speculation that we are reducing our operating schedule from 240 flights a day are ill-founded, as we will operate the full schedule on our booking system within the next four days,’ the spokesperson added.

While admitting that its bank accounts have been attached by the Income Tax Department, KFA said in the past also similar issues have happened and they have been resolved.

‘We have had a good meeting with our consortium of Banks who have accepted, in principle, the viability study prepared by SBI Capital markets and independent consultants. Our request for additional working capital has been acknowledged by the consortium and is subject to individual bank approvals,’ the spokesperson said.

The developments come after high fuel costs and falling revenue resulted in KFA losses in the third quarter of the current fiscal mounting to Rs.444 crore from a net loss of Rs.254 crore suffered in the like quarter of 2010-11.

Source: India Syndicate

Aviation stocks rally after direct jet fuel import allowed

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Tue, 07 Feb 2012 16:03:26 GMT

Aviation stocks rally after direct jet fuel import allowed

Mumbai: Scrips of three listed domestic carriers — Jet Airways, Kingfisher Airlines and SpiceJet — rallied after the government Tuesday allowed airlines to import jet fuel directly.

Aviation stocks rally after direct jet fuel import allowed

The decision on direct jet fuel imports was taken by an empowered group of ministers (EGoM) headed by Finance Minister Pranab Mukherjee.

Analysts said the move, announced by Civil Aviation Minister Ajit Singh, would help airlines to cut 10-15 percent of their operating cost.

The move will enable airlines to directly import jet fuel as an end user, thereby saving sales tax, which ranges between 20-35 percent and is levied by state governments.

The Indian aviation sector been reeling under rising aviation turbine fuel (ATF) prices caused by high sales tax and other levies. Domestic airlines are estimated to have lost around Rs.3,000 crore in the first six months of this fiscal.

Mumbai: Scrips of three listed domestic carriers — Jet Airways, Kingfisher Airlines and SpiceJet — rallied after the government Tuesday allowed airlines to import jet fuel directly.
This is very positive news for the industry. The airlines can be able to save up to 10-15 percent of their operating cost as jet fuel accounts for nearly 50 percent of the cost,’ Sharan Lillaney, aviation analyst, Angel Broking told IANS.

‘The decision will help the airlines to break-even, pay back the oil marketing companies.

The scrip of Vijay Mallya-led Kingfisher Airlines hit an intra-day high of Rs.30.90, up 20 percent from Monday’s close of Rs.25.75 at the Bombay Stock Exchange. The stock was hovering around Rs.28.50 in afternoon trade.

The Jet Airways stock too gained 18.06 percent and touched a high of Rs.351.90 from the previous close of Rs.298.05. The stock was Rs.336.90 around 2.30 p.m.

Budget carrier SpiceJet also gained 19.51 percent at BSE and touched an intra-day high of Rs.29.40 from the previous close of Rs.24.60

Analysts, however, said more clarity was required as to how airlines would manage the logistics of storing and importing fuel.

‘We have to see how the airlines will import the fuel, do they have the cash to do so, where will they store the fuel, will they use the oil marketing companies’ infrastructure or not. So there needs to be clarity on these things first, besides this, the news is very positive,’ said Lillaney.

Airlines have not yet come out with any logistics plan for storing and importing the fuel. This was one of the arguments by the three oil marketing companies Hindustan Petroleum, Indian Oil and Bharat Petroleum, who were opposing the move.

ATF is currently sold at Rs.71,155.22 per kilolitre (kl) in Kolkata, at Rs.67,702.21 per kl in Chennai, at Rs.63,864.31 per kl in Mumbai and Rs.62,907.82 per kl in New Delhi.

The average fuel price in cities like Kuala Lumpur is around Rs.41,000 per kilo litre, followed by Singapore at Rs.42,000 and Dubai at Rs.43,000.

Source: IANS