‘Penalising Kingfisher Will Only Precipitate Matters’


DIRECTOR GENERAL Civil Aviation (DGCA) EK Bharat Bhushan says that the Indian aviation sector is in deep financial crisis, be it State-run carrier Air India or billionaire Vijay Mallya-owned Kingfisher Airlines. Bhushan tells Samiran Saha that he cannot penalise Kingfisher Airlines as it would end up making matters worse.’

Bharat Bhushan
Turbulence: DGCA Bharat Bhushan, Photo: Naval Hans


The aviation sector is in deep financial crisis. When do you see the sector coming out of the red?
There is no doubt that the sector is in deep financial crisis. The government, as you are aware, is working on a policy package to help the entire cash-strapped industry come out of the financial rut. (According to apex civil aviation consulting body, Centre for Asia Pacific Aviation, all Indian carriers put together will probably lose $2.5 billion in the year ending March.) To formulate such a package, we have asked all the carriers, including the profit-making ones, to submit data on their prevailing financial position. Seven scheduled carriers, including Air India, have already submitted the required information. The data will help us see how these airlines are financially and how they would be able to conduct their operations.

Kingfisher has been defaulting on schedules, repayment of loans, salaries. It has never informed the DGCA about flight cancellations. Are you planning to penalise the airline?
There are strong provisions within the DGCA to penalise any airline that is not following the proper guidelines. We can penalise them, suspend their licence, and ask them to come back with scheduled operations when their finances are sorted out. But that is neither the answer nor the solution. Such an action will only precipitate matters. They are among the largest airlines, so we cannot just ask them to shut down. I will have to consult the ministry before initiating any action against Kingfisher.

But isn’t Kingfisher’s management responsible for the state the carrier is in?
I would not like to comment.

Kingfisher has seen mass exodus of pilots, cabin crew and ground staff recently. Doubts are being cast about safety of the carrier. Your comments?
We at the DGCA and also at the ministry are constantly monitoring the airline very closely. The Kingfisher CFO tells me they have adequate staff to keep their fleet afloat. They are now operating 28 aircraft out of the 64 in their fleet. Their aircraft are going through the regular mandatory checks required for commercial operations. We want minimum inconvenience to travellers.

Banks have declared loans to Kingfisher as non-performing assets; the airline cannot expect any new loans. How does it plan to fund its operations?
Kingfisher has been assured fresh finances by banks. I hope it is able to come out of the situation fast as it will be beneficial for all stakeholders. (Kingfisher owes a total of Rs 7,000 crore to a consortium of 18 banks led by SBI. It owes SBI Rs 1,580 crore, IDBI Bank Rs 727.63 crore, Punjab National Bank Rs 710.33 crore, Bank of India Rs 575 crore and Bank of Baroda Rs 537 crore.)

Kingfisher staff has not been paid for months now. There is a mass exodus. Where should the staff head for redressal of their problems?
Wages are a labour issue. Having said that, I have met their representatives and have told them to address these issues at the earliest. The airline needs to keep the interest of the staff in mind to prevent further exodus.

Have you been told about the closure of any more offices in India or abroad?
The Kolkata office is shut as the staff there had resorted to strike. This has also affected Kingfisher’s operations in the Northeast, which is a very important sector and cannot be kept disconnected. The airline also has problems in Southeast Asia, but it has assured us that normal business will resume soon.

Samiran Saha is Assistant Editor, Business, with Tehelka.
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