Service tax dept seizes Kingfisher aircraft over dues

Mangalore Today/ NDTV

Bangalore, Dec 11: Kingfisher Airlines, which has not operated a single flight since September 30, hit another turbulent patch after the service tax department seized one of its aircraft—a 62-seater ATR—for non-payment of dues, sources said. The aircraft was seized on Saturday.

 

 

The airline has not paid service tax to the tune of Rs. 63 crore, according to the sources. A notice was served to the airline which failed to secure the payment, they added.

Mumbai airport authorities have also threatened to issue an eviction notice after the carrier failed to respond to an earlier notice asking it to clear the Rs. 22 crore dues towards parking and navigational charges.

"We have yet to hear from Kingfisher Airlines on our notice. They were given seven days’ time to clear our dues and so far neither they have responded to the notice nor have made any payment," sources said told PTI earlier this month. They added that the airport operator may now slap an eviction notice on the cash-strapped airline and lease out the space to other carriers.

Kingfisher Airlines promoted by liquor-baron Vijay Mallya owes over Rs. 1,000 crore in vendor and tax arrears. According to the revenue department, it has to repay tax dues worth more than Rs. 200 crore to the government.

Launched in May 2005, the airline has not reported a single penny in profit and has bank debt over Rs. 7,000 crore and unpaid interest thereon since January. It also has accumulated losses of nearly Rs. 10,000 crore, apart from the salary dues of the past seven months. The Centre for Asia Pacific Aviation has said a fully funded turnaround for Kingfisher would cost at least $1 billion.

Labour unrest towards the end of September led to the airline suspending operations from October 1 and on 19th of the same month, the regulator DGCA had suspended its flying licence till further orders for its failure to come up with a viable plan of financial and operational revival. 

Airport operators have also asked the DGCA to keep on hold the renewal of Kingfisher’s license, which is slated to expire on December 31, until their dues are cleared.



Etihad Airways set to buy stake in Kingfisher Airlines: report


Gulf carrier Etihad Airways is close to buying a 48 per cent stake in debt-ridden Indian carrier Kingfisher Airlines for a little over Rs. 3,000 crore, a newspaper reported on Tuesday.

A formal announcement of the deal could come around December 18, the birthday of Kingfisher’s flamboyant chairman, Vijay Mallya, the newspaper said, without saying how it got the information.

 

Kingfisher, whose planes have been grounded for the past two months, declined to comment on the report. Etihad did not immediately respond to an email sent by Reuters.

Abu Dhabi-based Etihad will initially buy a 30 per cent holding in December and a further 18 per cent by next August, the paper said, adding Etihad and Kingfisher refused to deny or confirm the stake sale.

Battling stiff competition and high operating costs, Indian carriers have been in talks to sell minority stakes to foreign investors. Etihad was reported to be eyeing buying a stake in Jet Airways, India’s largest airline by total passengers carried.

Kingfisher, which Mr Mallya launched with much fanfare in 2005, was once India’s second-largest airline by domestic market share. For most of this year, the carrier has struggled to pay its staff and has not flown since early October due to protests and safety concerns.

According to one estimate, it is saddled with roughly $2.5 billion in debt.

Kingfisher shares were up 4.7 per cent in early trade on Tuesday.