* Licence suspended until turnaround plan approved
* Full cancellation of licence unlikely - source
* Kingfisher suspends all future bookings
* Airline has been grounded since start of month
(Adds Kingfisher statement, detail)
By Anurag Kotoky
NEW DELHI, Oct 20 Kingfisher Airline's
licence was suspended on Saturday after it failed to address the
Indian regulator's concerns about its operations, forcing the
debt-laden carrier to stop taking bookings.
Controlled by Vijay Mallya - the self-styled "King of Good
Times" - and seven months behind on salary payments among other
missed bills, Kingfisher's fleet has been grounded since the
start of the month when a staff protest turned violent.
The airline, which has never made a profit since being
founded in 2004 and reeling under $1.4 billion of debt, will
have its licence reinstated if it provides a plan that satisfies
the Directorate General of Civil Aviation (DGCA).
A complete cancellation of the licence was unlikely, said a
government source, who declined to be named as he is not
permitted to speak to the media.
The company's steep decline has underlined the problems of
operating in India's airline sector, where players grappling
with rising fuel costs face aggressive pricing caused by
The suspension signalled the regulator's lack of patience
with Kingfisher after months of cancelled flights and staff
walkouts, and marked a rare tough stance by the government
against a high-profile corporate.
"The actual position is not changed because of this order,"
Kingfisher said in a statement. "We have, in any case, always
maintained that once the issues with the employees are resolved,
we will first present our resumption plan to DGCA for review,
before resuming operations".
Kingfisher, which had previously suspended all bookings
before Nov. 6, said it would cease taking any reservations until
Mallya, a liquor baron who owns a Formula 1 motor-racing
team, is famous for lavish parties at his $16 million beachside
villa in Goa and also his company's annual swimsuit calendar.
The licence suspension, until further notice, was announced
by Arun Mishra, director general at the DGCA.
The move had been widely expected after Kingfisher failed to
respond properly to queries from the regulator regarding its
ability to provide a "safe, efficient and reliable service".
"The suspension of Kingfisher's licence is unfortunate but
not unexpected," Amber Dubey, director, aerospace and defence at
KPMG India, said in a statement. "Kingfisher's ability to bounce
back from this situation appears challenging."
Kingfisher's woes will likely help rivals such as Indigo and
SpiceJet by lowering capacity on key routes.
The airline had said on Friday it expected to begin flying
again on Nov. 6 if the government approved its plan to resume
The Centre for Asia Pacific Aviation has said a fully funded
turnaround for Kingfisher would cost at least $1 billion.
(Writing by Henry Foy; Editing by Dan Lalor)