IATA Suspends Kingfisher Airlines, Air India Plans Revival

Wednesday, 14th March 2012 at 01:49am

The International Air Transport Association (IATA) has suspended India's besieged Kingfisher from participating in the airline industry's key payment system due to unpaid bills.

IATA is a clearinghouse that allows airlines to divide earnings from codeshare flights, or flights involving multi-leg trips with a number of different airlines involved.

It has also been learned that Japan Airlines canceled its agreement with Kingfisher to allow its passengers to book multi-leg flights with the beleaguered carrier.

According to the struggling airline, its unpaid IATA bills were caused by a hold order placed on its accounts by income tax authorities. However, Kingfisher said it is working on their situation with tax authorities and expects its frozen accounts to be reopened to allow them to pay their IATA dues and reinstate their status with the clearinghouse.

Meanwhile, Kingfisher Airlines says its 200 flights ferrying passengers to 46 domestic and international routes continue as scheduled.

The Indian carrier has been suffering losses since it began operations in 2005, and has had a number of incidences involving grounded planes, countless canceled flights, and failure to pay its staff and crew.

With Kingfisher Airlines in dire financial and operational straits, the country's flag carrier, Air India is striving to come to the forefront.

Likewise plagued by losses and inability to pay its employees' salaries, the airline is looking into increasing the total number of its flight departures for the summer from 380 to 405 a day beginning March 31 to generate additional revenues.

It also plans to launch new routes to in-demand Middle Eastern destinations, while discontinuing some of them. It has likewise undertaken flight restructuring around Dammam in Saudi Arabia where a large Indian population works in a number of oil fields and other ancillary industries.

The airline has opened up other routes to include daily flights between Visakhapatnam and Dubai via Hyderabad, and a daily flight from Delhi to Bahrain to be routed via Abu Dhabi. The Delhi-Tokyo route will increase five times a week from the previous four-a-week flight schedule, and the Delhi-Dammam route will increase to daily flights from its previous twice-weekly schedule.

Air India's daily Hyderabad-Kolkota route will also be reopened after it was discontinued in 2010 due to a fuel price hike.

While Kingfisher Airlines remains under IATA suspension, Air India has already commenced its "low-cost" domestic route operations in preparation for its revival as the country's national carrier.

The airline has quietly begun converting older A320 planes into economy class configurations, and has launched single-class low-cost flights last month offering 168 economy seats. While Air India remains the sole full-service airline flying a route normally serviced by budget carriers, it intends to keep and convert it into this new economy route as it continues to reconfigure more A320s.

In fact, Air India has already launched a second Mumbai-Kochi flight schedule to increase its passenger load. It hopes that by entering the low-cost market, it can introduce new flights, re-jig flight timings, and increase its overall aircraft utilization.

While it restructures its additional summer flight schedule, Air India continues to await the Union Cabinet's final decision on its purchase requisition of Boeing 787 Dreamliners, a planned acquisition that has come under fire after former Civil Aviation Minister, Praful Patel's move to purchase 27 Dreamliners came under scrutiny from the Comptroller and Auditor General.

The Dreamliners, considered the ideal aircraft for medium-haul international flights, have been earmarked for purchase and are believed to be vital to Air India's turnaround.

However, despite its flight restructuring for the summer, uncertainty remains over the number of Dreamliners to be purchased, and when deliveries will actually occur.

By: Pete Lee.