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Wed, Feb 22, 2012

India Demands Answers From Kingfisher Airlines

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."

FMI: www.flykingfisher.com

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