Oct 18, 2012, 11.37 AM IST

Kingfisher Air slips 5% on likely suspension of licence

r Airlines slipped 5% to Rs 12 after the civil aviation minister said that the airport regulator may suspend or cancel the company’s flying licence.

Source: Moneycontrol.com

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Kingfisher Airlines slipped 5% to Rs 12 after the civil aviation minister said that the airport regulator may suspend or cancel the company's flying licence. He made this statement after the airline extended the lockout for the second time in a month.

Also, due to grounding of its flights, the Directorate General of Civil Aviation (DGCA) has not approved the winter schedule, the airline submitted to it. As has been the trend, all airlines have to submit their flight schedule to the regulator before the onset of winter and summer seasons.

Apart from suspending operations, there are a series of issues that have gripped the airline. The most critical one being the airline's inability to pay pending salaries to its staff. However, the management has said that it will meet pilots and engineers on Monday to sort out salary issues.

Earlier this month, banks released around Rs 60 crore to KFA from an escrow account of service tax department on "humanitarian grounds" to pay salaries to the employees. The private airline's monthly wage bills stand around Rs 20 crore.

Launched in May 2005, KFA has never made profit, and is sitting on a debt pile of over Rs 8,000 crore, including over Rs 420 crore of tax arrears.

A group of 17 lenders, led by State Bank of India, have declared their Rs 7,000 crore advances to KFA as non--performing since January and have been refusing any fresh lifeline to the airline till the management infused fresh funds into the carrier.