Kingfisher Air Loses License After Failing to Give Funding PlanKarthikeyan Sundaram
Kingfisher Airlines Ltd., the Indian carrier that halted flights because of a cash crunch, lost its operating license after failing to provide a funding plan for its revival, an aviation ministry official said.
The permit, issued in August 2003, lapsed today, said the official, who declined to be identified citing the ministry policy. Kingfisher can seek to renew the license within two years, the official said in a telephone interview.
A revival plan the airline last week submitted to India’s aviation regulator wasn’t backed by details of financing, according to Civil Aviation Minister Ajit Singh. Kingfisher’s parent UB Group will provide the funds required to restart flights, Prakash Mirpuri, a spokesman for the carrier, said in an e-mail last night. Mirpuri didn’t respond to two calls to his mobile phone today.
Shares of Kingfisher fell 3 percent to 14.45 rupees at close of trading in Mumbai. The benchmark BSE India Sensitive Index gained 0.8 percent. The stock declined 29 percent last year after plunging 68 percent in 2011.
The regulator suspended Kingfisher’s permit in October following flight disruptions caused by strikes triggered by unpaid wages. Employees later agreed to resume work after management pledged to pay salaries.
The airline is in the process of procuring some documents that the Directorate General of Civil Aviation has sought, Mirpuri said in his e-mail. Kingfisher “is confident of securing approval from the DGCA on the restart plan,” he said.
Kingfisher has been seeking cash for more than two years and said it’s in talks with possible investors, including Etihad Airways PJSC. The carrier, controlled by liquor tycoon Vijay Mallya, has piled up debt of 85 billion rupees ($1.6 billion).