There seems to be no end to the woes of crisis-hit Kingfisher Airlines. Beleaguered Kingfisher Airlines was today suspended for non-payment of dues for the second time in just over a month by the IATA from participating in a system which enables the airlines to settle their interline billings globally.
"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," IATA's Assistant Director (Corporate Communications) Albert Tjoeng said in a statement from Singapore.
He said, "Kingfisher's participation in the ICH will be reinstated after the airline fulfills the ICH requirements."
This is the second time since February two that the cash -strapped carrier has been suspended from ICH for not paying its dues. Earlier, its status was restored ten days later. It has now been suspended once again, IATA sources said.
Airlines and airline-associated companies join the IATA Clearing House to settle accounts for services provided by them to other airlines or firms.
The bank accounts of the airline, which is struggling to stay afloat, have been frozen by the income tax, service tax and excise and customs departments for failing to pay dues.
Crisis-ridden Kingfisher Airlines had last month also delayed joining the global airlines' grouping 'oneworld' due to its precarious financial position. It was slated to formally join the airline alliance on February 10.
The airline, which never made a profit since its inception in May 2005, reported a net loss of Rs 444.26 crore in the December quarter. It suffered a loss of Rs 1,027 crore in 2010-11 and has a debt of Rs7,057.08 crore apart from overRs 4,000 crore of accumulated losses and a restructured long-term loan of around Rs7,000 crore.
Meanwhile, the Kerala-based Federal Bank has classified its Rs 90-crore exposure to debt-ridden Kingfisher Airlines as non-performing loan.
"The guarantee has devolved and since the account has not been serviced for 90 days, the bank has classified the exposure as bad loan," the bank's executive director Abraham Chacko said.
"We are a part of a consortium and would await banks to decide on the terms of restructuring," he said. Recently, the old private sector bank had restructured loans of about 300 crore lent to Air India.
Banks have a total exposure of about Rs 7,000 crore to Kingfisher, of which about Rs 4,000 crore is in the form of term loans. Lenders such as State Bank of India, ICICI Bank and IDBI Bank have already faced mark-to-market losses to the tune of about Rs 2,800 crore after the first debt recast, in which a part of their debt to the airline was converted to equity, as KFA stock price has consistently declined since then.
Federal Bank's restructured assets at the end of December 2011 stood at Rs 1,400 crore.
The Income Tax department on Wednesday freezed 19 more accounts of the Kingfisher Airlines. Reports said that the department has recovered only Rs 23 crore so far and the authorities will soon take a decision on attaching Kingfisher's properties. It is also likely To freeze UB Group Accounts as well.
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