Agents to stop selling Kingfisher tickets

Agents to stop selling Kingfisher tickets

By: || Updated: 07 Mar 2012 09:21 AM


New Delhi/Mumbai:
In yet another big blow to Kingfisher Airlines, travel agents were asked
by a leading international association Wednesday to immediately stop
booking tickets on the carrier's behalf for failure in settling dues since
February.

The move -- which is akin to the Reserve Bank of India
(RBI) removing a commercial bank from its currency clearing system -- came
barely hours after the Income Tax Department froze more bank accounts of
the Vijay Mallya-led carrier for non-payment of dues.

According
to industry experts, the move to suspend Kingfisher from the clearance
system on account of non-payment of dues to the International Air
Transport Association (IATA) is expected to affect nearly 30-35 percent of
its business.

This puts a question mark over whether tickets for
the carrier can now be booked using globally interconnected systems like
Galelio, Sabre and Amadeus. The IATA had previously barred Kingfisher from
its international ticket clearing house (ICH) system on Feb 2, but
reinstated it eight days later after some payments were made.

"IATA
has suspended Kingfisher Airlines' participation in the ICH. This is
because the airline did not settle their ICH account within the stipulated
deadline," a statement issued by IATA from Geneva said. "Kingfisher's
participation in the ICH will be reinstated after the airline fulfills the
ICH requirements," said the association that has all passenger and cargo
carriers as its primary members.

IATA further said that the
passenger carrier will not be able to settle its transactions from other
ICH member airlines. "Suspension from the ICH means that airline will not
be able to settle their transactions with other ICH members via the
clearing house." However, despite the suspension, airlines can continue to
function by settling billaterally with other airlines.

Kingfisher's
woes were exacerbated Feb 18 when its employees in Kolkata went on a flash
strike as they had not received their salaries for several months. The
airline, which later on curtailed its flight plans, blamed the seizure of
its bank accounts by the Income Tax Department as the main hurdles in
clearing of dues.

Kingfisher has a debt of Rs.7,057.08 crore. Its
net loss widened to Rs.444.27 crore for the quarter ended Dec 31, 2011,
from Rs.253.69 crore in the October-December quarter in the last fiscal.
The airline's share, which was ruling at Rs.49.25 about a year ago, closed
Wednesday at Rs.21, with a loss of 6.25 percent over the previous close.




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