KFA's slots, foreign rights withdrawn

Written by fe Bureau | New Delhi | Updated: Feb 26 2013, 06:42am hrs
In another major blow to grounded Kingfisher Airlines, the civil aviation ministry said on Monday that it has withdrawn all international rights and domestic flying slots allocated to the airline with immediate effect.

These international rights have been withdrawn from Kingfisher Airlines on account of non-utilisation by the airlines, said the civil aviation ministry in a statement issued on Monday.

Similarly it has also been decided to withdraw the domestic slots that were allocated to Kingfisher Airlines at different airports for domestic flights. Airports Authority of India has been directed to make these slots available to other domestic carriers as per their demand.

The liquor baron Vijay Mallya-owned airline has not flown since October 1 and its scheduled operators permit expired on December 31. The airline stopped international operations as of April 2012.

Before April 2012, the airline had stopped flying to many international destinations.

The airline had rights to fly to eight countries. It had rights to fly 14 flights per week each to Bangladesh and Hong Kong, seven each to Nepal and Singapore, seven flights per week to UK from Mumbai, Delhi and Bangalore, 21 each to Thailand and UAE. Kingfisher also could fly 14 flights per week to Sri Lanka.

The aviation ministry said that the slots would be available to other airlines for their use. This would give additional availability of approximately 25,000 seats per week for use by Indian carriers to these eight countries, some of which are much in demand by these carriers, said the ministrys statement.

Analysts said that rights to UAE, Singapore and Thailand would be more in demand while the UK may remain unused. As of now we could see IndiGo, SpiceJet and Jet Airways trying to get the slots for UAE, Singapore and Thailand, said an aviation analyst with a foreign brokerage firm.

The person couldnt be quoted as they are not authorised to speak to the media. UK slots are unlikely to be taken up as only Jet Airways and Air India can fly there and they are happy with the capacity there, specially since Virgin Atlantic re-entered the market.

Kingfishers lenders have also increased pressure on the airline in recent week. The lenders expect to recover up to R1,000 crore by monetising securities in the March quarter itself.

Selling securities as collateral is the plan, said Shyamal Acharya, State Bank of India deputy managing director (mid-corporates accounts), in February. SBI chairman Pratip Chaudhuri had said at the same event that sale of shares of companies controlled by UB Group and held as collateral can help recover as much as R1,000 crore.

Kingfishers parent company United Breweries (Holdings), however, has sought shareholder approval to increase lending limit to the airline by R450 crore.