Kingfisher Airlines’ Licence Suspended

Saturday, October 20, the government of India suspended Kingfisher Airlines’ (KING.NS) licence. Upon failing to address the Indian regulator’s concerns about its operations, the debt-ridden airlines was stripped of its license and was forced to stop booking procedures.

The airline which is currently reeling under $1.4 billion of debt, was told that its licence will be reinstated if it provides a plan that satisfies the Directorate General of Civil Aviation (DGCA). Launched in 2004, the airlines is yet to make any profit.

According to a government source, it is alleged that a complete cancellation of the licence is improbable. 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 overcapacity.

Kingfisher, which had previously suspended all bookings before November 6, said it would cease taking any reservations until operations resumed.

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