India's Kingfisher cancels dozens of flights

AP News
|
Posted: Nov 11, 2011 2:04 AM
India's Kingfisher cancels dozens of flights

India's privately owned Kingfisher Airlines was forced to cancel dozens of flights Friday amid a burgeoning crisis at the country's second-largest carrier.

Kingfisher, which is partly owned by brewery tycoon Vijay Mallya, has canceled more than 120 flights this week as pilots and crew called in sick after their October salaries were delayed.

The airline says flights were canceled because it was reconfiguring planes, the Press Trust of India reported. The Economic Times reported that leasing companies want Kingfisher to return their planes after the company fell behind on payments.

Kingfisher shares slid more than 12 percent on the Mumbai stock market Friday.

India's airline industry has been hit by rising fuel costs and a crushing price war. Kingfisher is currently struggling under debt of $1.4 billion and shut down its budget carrier in September after it ran up losses.

The airline, which began operations in 2005, bought India's first budget airline Deccan Airways in 2008, leading to the creation of its budget wing, Kingfisher Red.

Kingfisher's problems have worsened after three oil companies stopped giving it jet fuel on credit and asked the airline to make daily payments.

The airline has grounded eight of its leased turboprop ATR aircraft, and returned 14 leased A320 jets, leaving it with fewer aircraft in its fleet.

The cash-strapped airline has also piled up unpaid fees to airport operators and other agencies who are now adding to its financial pressures.

Kingfisher has said it is restructuring its operations.