It was a triple whammy for cash-strapped Kingfisher Airlines on Wednesday. The International Air Transport Association (IATA) announced the suspension of Kingfisher from the “IATA Clearing House” which essentially is a mechanism “to enable airlines and associated companies to settle interline billings securely and efficiently”.
Further, the Income Tax department on Wednesday also froze 19 more accounts of Kingfisher Airlines. To add to the woes, state-owned oil firms suspended supplies of Aviation Turbine Fuel (ATF) to Kingfisher on Wednesday evening due to non-payment of dues, leading to a serious crisis since suspension of oil supplies immediately affects flight schedules.
A senior official from HPCL, which is the largest ATF supplier to Kingfisher, said that HPCL stopped supply of fuel to the airline around 6.30 pm all over India due to non-payment (of dues). ‘’Negotiations are going on with the airline. We are hopeful of a solution,” added the HPCL official.
Kingfisher Airlines stocks were down by 6.25 per cent on the Bombay Stock Exchange on the news of freezing of more accounts, which will make the daily operations of the airline more difficult. The service tax department has already frozen about 44 accounts of the airline.
The tax authorities are now threatening to attach assets of the Kingfisher and in a worst case scenario, even those of the UB group itself. Kingfisher said it was talking to the tax authorities and waiting for its accounts to be un-attached after which the payment of dues would be made to the (IATA) ICH. In addition, the state-owned Airports Authority of India (AAI) is also upset with Kingfisher for non-payment of dues.
Meanwhile, earlier in the day, IATA said, “IATA has suspended Kingfisher Airlines’ participation in the IATA Clearing House (ICH). This is because the airline did not settle their ICH account within the stipulated deadline.”