Biggest crisis: Kingfisher hits air pocket

After oil companies and airports, rivals have stepped up pressure on Kingfisher Airlines (KFA).

Jet Airways, the leader in market share, has stopped accepting passengers from KFA in case of a cancellation or disruption over a payment dispute.

KFA, facing acute cash crunch and mounting losses, has cancelled nearly 30 flights across its network for the next 10 days.
Officials said the airline took the decision since KFA had not cleared Rs 20 crore (Rs 200 million) in dues related to passenger transfers.

Typically, a carrier whose flight is disrupted issues a 'flight interruption manifest' on the basis of which the other airline issues tickets. The bill settlement between the two is made through the International Air Transport Association's clearing house at Geneva in 30 days.
Full-service carriers, which are members of IATA, sign prorate agreements to determine revenue sharing. These have a clause allowing airlines to transfer passengers to other carriers at a pre-determined rate in case of cancellations or disruptions.

"It (KFA) owes us close to Rs 20 crore. We stopped accepting their passengers," said a Jet official, who did not wish to be named. Jet Airways spokesperson did not respond to an email query.KFA said, "The company has reduced frequency of some of its flights, predominantly over weekends or on some routes where there has been slow demand. For a limited period, these flights are either being cancelled or clubbed with other KFA flights in a well-controlled pre-determined manner."

"These steps have been taken in a planned manner and in close coordination with our travel partners and guest relations teams to avoid any inconvenience that may be caused to our guests," KFA said.The Directorate General of Civil Aviation has taken cognizance of the sudden cancellations and issued a notice to Kingfisher under Rule 140 (a) of the Aircraft Rules, 1937, for not taking prior approval before cancelling flights, as is required by the rule.

It also asked the airline what steps it had taken so far to take care of the passengers of the flights cancelled in terms of returning their fares, accommodating in alternative flights or providing modes of transportation.