India regulator presses Kingfisher for recovery plan

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India's Kingfisher Airlines has been asked by the country's aviation regulator to provide a timeline for getting its grounded aircraft back in the air and for its recapitalisation efforts.

The airline's senior executives met officials from the Directorate General of Civil Aviation (DGCA) on 5 January to review the regulator's recently concluded financial audit that covered all domestic airlines, said Kingfisher CEO Sanjay Aggarwal.

"We would like to clarify that DGCA did not have any significant findings or concerns with regard to the safety at Kingfisher Airlines and that we have an adequate number of pilots and engineers to operate our scheduled services," said Aggarwal.

In its financial audit of Kingfisher, the regulator raised concerns that the cash-strapped airline's financial situation may affect its safety standards and said that it is reasonable to withdraw the airline's operator's permit.

The regulator is also concerned that a third of Kingfisher's fleet are grounded because of a lack of components, spare parts and engines, and that a number of pilots have left the airline recently.

Media reports in India have said that the DGCA's main aim is to ensure that the financial status of the country's airlines do not affect passengers' safety and that the situation has not reached the point where the airline's permit will be withdrawn.

The financial audits were carried out from a safety perspective in December 2011 because of the reported financial stress experienced by scheduled domestic airlines, said India's Ministry of Civil Aviation in a statement.

"Several findings have been noted with respect to backlog of flight crew training, flight operations quality assurance monitoring, shortage of operational crew, delay in disbursement of salaries, etc," the statement added.

The ministry added that it was concerned about budget carrier Air India Express as well because it is facing a shortage of pilots.

The CEOs of all the airlines have been asked to review their respective airlines and told to submit their recovery plans in the week ending 13 January, added the ministry.

Kingfisher cancelled a slew of flights late last year, saying that it needed to reconfigure the aircraft to improve revenue production.

Several lessors were heard to be in discussions with the airline about taking back leased aircraft after Kingfisher was said to have defaulted on payments.

In December 2011, the airline reported a net loss of Indian rupees (Rs) 4.69 billion ($89 million) in its second fiscal quarter against a net loss of Rs2.31 billion in the same period a year earlier.

"We would like to reassure our valued guests that at Kingfisher Airlines, safety is of paramount importance and that our scheduled flights will continue to operate with utmost safety in full compliance with regulatory requirements and stipulations in this regard," said Aggarwal.