Locked in miles, nowhere to fly

The 'King of Good Times' is giving its partner banks a hard time.

Banks that have partnered Kingfisher Airlines to offer air miles as rewards to credit card customers are stuck with the inventory purchased from the private carrier, as it has reduced its flight services and suspended operations on some routes.

Typically, banks buy air miles three-six months in advance from airline companies at a discount to the market price. The lenders offer these miles as rewards to their clients for credit card spends. These contracts do not have a buy-back clause that would allow banks to return the miles and recover money from the airline.

Several banks, including State Bank of India, ICICI Bank, HDFC Bank and Axis Bank, have partnered Kingfisher Airlines for their credit card reward programmes.

"We are not buying fresh miles from Kingfisher, since we already have that in our inventory and there are no takers. We may have to incur a loss as there is no buy-back clause but it will have no significant impact on our overall operations," said a senior official of a large private sector bank.

The official said the bank was willing to offer alternative rewards to its clients, who have received Kingfisher miles but not used them yet.

Besides partnering for air miles, a few lenders like American Express and ICICI Bank also have co-branded credit cards with Kingfisher Airlines. Bankers said they were no longer marketing these cards on their own.

"If a customer wants a Kingfisher card, only then are we offering the card," said a banker familiar with the developments.

The cash-strapped Kingfisher Airlines, which reported a loss of Rs 1,027 crore in 2010-11 and Rs 1,175 crore in the first nine months of this financial year, is believed to have accumulated losses of around Rs 6,000 crore. The airline has opted to restructure its debts for the second time and is finding it difficult to pay staff salaries on time.

Source: busineesstandard

Kingfisher Airlines pilots skip work, 40 flights cancelled

New Delhi: Several Kingfisher Airlines pilots stayed away from work on Monday over non-payment of salaries for over three months and indifferent attitude of the management leading to over 40 flights being cancelled across the country.

Kingfisher cancelled 11 flights from Mumbai and three from Delhi after pilots failed to turn up. The cash-strapped airline has also suspended operations at the Kolkata airport where one flight has been cancelled.

Over 20 per cent of Kingfisher flights which have already been curtailed will be hit hard. Pilots have also demanded a meeting with Kingfisher CEO Sanjay Aggawral to assure them payment of all dues. The airline maintains that it has back-up to operate flights for now.

Kingfisher issued a statement claiming that salaries have been delayed as several accounts of the company have been frozen by the tax authorities.

"The flight loads have reduced because of our limited distribution ability caused by IATA suspension. We are therefore combining some of our flights. Also, some of the flights are being cancelled as a result of employee agitation on account of delayed salaries. This situation has arisen as a consequence of our bank accounts having been frozen by the tax authorities. We are making all possible efforts to remedy this temporary situation," said the statement.

"We will operate approximately 80 per cent of our planned schedule. We expect to return to our full schedule shortly. Those guests whose flights are affected are being notified. They are either being accommodated on other airlines or offered a full refund," the airline added.

Source: IBNLIVE

Uncertainty over refund of cancelled Kingfisher Airlines tickets

New Delhi, March 12:

If you are a Kingfisher Airlines' passenger, it will be in your best financial interest to put up with the inconvenience of the airline's revised schedule and fly with it rather than seek a refund on your ticket. That is because you are unlikely to get it in a hurry.

In a move that is likely to hit the airline even more, some travel agents are maintaining that Kingfisher travellers should assume that all tickets purchased for flying with the airline are non-refundable.

This situation has arisen because at the moment there is little clarity on who should refund the money on a cancelled ticket. While some say that this is the responsibility of the Geneva-based International Air Transport Association (IATA) as Kingfisher is an IATA member, others point to the recent suspension of the airline from the global body's clearing house.

A mail sent by the Travel Agents Federation of India (TAFI) to IATA on the issue is also vague. "All remittances received from agents will be held by us and will not be settled to the suspended airline (Kingfisher) until an agreement has been reached with the airline for processing of refund in respect of unused or partially used tickets," an interim response from IATA India has said.

"Unless the airline comes out with a clear refund policy regarding tickets issued on BSP/IATA stock, travellers should assume all such tickets are non-refundable. This is a very unique situation and no one has clarity on what the next step will be," said Director, STIC Travel Group, Ms Richa Goyal Sikri.

According to a Mumbai-based travel agent, technically it should be the travel agent's responsibility to refund a passenger's travel cost and recover it from the airline, but this is unlikely to happen. A Delhi-based travel agent who contacted Kingfisher Airlines after the TAFI mail was sent was told to tell passengers to contact Kingfisher directly.

Meanwhile when contacted, IATA told the Business Line, "We're currently in discussions with Kingfisher Airlines to reach an agreement for the refund process."

Source: Thehindubusinessline

Deposit Jet Airways payments with service tax dept, IATA told

NEW DELHI, March 12:

Tax authorities have asked the Geneva-based International Air Transport Association to deposit payments from Jet Airways into the service tax department's accounts.

"The department has asked IATA to remit payments received on Jet's account to the service tax department account rather than pay Jet Airways," Mr S. K. Goel, Chairman, Central Board of Excise and Customs, said.

This follows the airline defaulting on payment of its service tax dues.

Two options

"There are two ways of settling the dues - one is to leave the matter as it is, which means on March 15, the department will get the money from IATA. Alternatively, we pay on the 12th or 15th and get the notice withdrawn. We are evaluating both the options," the airline's Senior Vice-President, Finance, Mr Mahalingam Shivkumar, told Business Line.

The airline has to pay about Rs 35 crore a month as service tax. The services tax dues for February should have been deposited in the account latest by March 6, which the airline failed to do. On Saturday, Mr Shivkumar had told Business Line that the funds would be deposited by March 12.

Meanwhile, the airline, in a statement, denied that any of its accounts have been frozen.

"The service tax department has been in touch with IATA with regard to having the proceeds remitted when the collections are remitted to Jet Airways. Therefore, it is incorrect and misleading to say that the airline's accounts have been frozen. No bank account of Jet Airways has been frozen or attached," the airline statement adds.

Source: Thehindubusinessline