India's aviation regulator has issued a financial audit of the country's airlines and said that cash-strapped Kingfisher Airlines should be wound up because of safety concerns.
The Directorate General of Civil Aviation (DCGA) said the airline's financial situation could affect its safety standards and that it is reasonable to withdraw its operator's permit.
The DGCA could not be reached for comment, but media reports in India said the regulator is concerned that a third of Kingfisher's fleet are grounded because of a lack of components, spare parts and engines, and that more than 20 pilots have left the airline in the last two months.
When contacted, Kingfisher said the audit is one which DCGA can carry out "on any airline" and that it is meeting with the regulator today to address a list of questions that has been posed to them.
"No inference can be drawn from this (audit) and Kingfisher is operating its scheduled services with utmost safety," said its corporate communications vice president Prakash Mirpuri.
On reports that the airline is downsizing its staff strength, Mirpuri said: "Kingfisher categorically denies news reports appearing in a section of the press which claims that the airline is planning to lay off any staff."
The DCGA report also raised concerns about the safety standards of budget carrier Air India Express due to its pilot shortage problem. The regulator also looked at financial issues facing Jet Airways, JetLite, SpiceJet and GoAir.
Late last year Kingfisher cancelled a slew of flights, saying that it needed to reconfigure the aircraft to improve revenue production.
Several lessors were also in talks to take back leased aircraft after Kingfisher reportedly defaulted on payments.
In December, the airline reported a net loss of Rs4.69 billion ($90 million) in its second fiscal quarter, against a net loss of Rs2.31 billion for the same period a year earlier.
Source: Air Transport Intelligence news