As Many As 40 Percent Of Flights Canceled Over Tax Spat
Debt-ridden Kingfisher Airlines, which has struggled financially
for years, is being pressed by the Indian government for answers on
why it has been canceling as many as 40 percent of its flights
(according to an IBN report) in recent days. The airline is telling
the government that a big part of the problem is the tax
authority's freezing of the airline's accounts, which is blocking
payments for operational needs.
Regulators are also upset that the cancellations have come
without notice, forcing stranded passengers to pay on-the-spot
rates for seats on other airlines, some at rates more than double
their original tickets on Kingfisher. Reuters reports India's Civil
Aviation Minister Ajit Singh told reporters on Monday, "It is a
very serious matter, we recognize it and DGCA has called Kingfisher
to find out what's going on, what are their plans and why did they
not anticipate the problems and inform DGCA before."
The company issued a statement Monday which says, in part, "We
are in dialogue with the tax authorities to agree a payment plan
and get the bank accounts unfrozen at the earliest."