India’s aviation ministry said on Monday it had withdrawn international flying rights and domestic slots from debt-laden Kingfisher Airlines, making more seats available for rival carriers.
The move follows an announcement by Kingfisher’s creditor banks earlier this month that they would start recalling loans — a step which analysts then said could spell the end for the carrier controlled by liquor baron Vijay Mallya.
The government “has decided to withdraw all international bilateral traffic rights allocated to Kingfisher Airlines with immediate effect”, an aviation ministry statement said.
Kingfisher’s slots across India and routes to Bangladesh, Hong Kong, Nepal, Singapore, Sri Lanka, Thailand, Dubai and Britain were seen as being of potential interest to a foreign buyer which could save the carrier from bankruptcy.
The cancellation of these rights will make available 25,000 international seats a week for use by other Indian airlines to eight countries — “some of which are much in demand by these carriers”, the ministry said.
The action had been taken “on account of non-utilisation” of the flying rights, the ministry said.
The Airports Authority of India regulatory body “has been directed to make these slots available to other domestic carriers as per their demand”, the ministry said.
A year ago, the airline was India’s second largest by passengers but now it is teetering on the edge of oblivion, owing an estimated total of $2.5 billion to banks, suppliers, staff and other creditors.
A spokesman for Bengaluru-based Kingfisher declined to comment on the government’s announcement when contacted by AFP.
The airline, once known for its red-carpet cabin service, posted a net loss of 7.55 billion rupees ($142 million) in the three months to December.