Thaindian News

New Delhi/Mumbai, March 9 (IANS) Cash-strapped Kingfisher Airlines Friday said that it has made alternate arrangements for selling its tickets after it was suspended from inter-airline transaction body International Air Transport Association (IATA).

“As a result of the recent suspension of Kingfisher Airlines from IATA’s ICH (IATA clearance house) and BSP (billing and settlement) platforms, the airline has made alternate arrangements to ensure that the customers can continue to book their travel on Kingfisher, via select leading travel agents,” an airline official said.

The airline further said it was unable to pay its dues to IATA because its bank accounts were seized Wednesday by the Income Tax Department, with whom the carrier is negotiating.

“This situation has arisen as a consequence of our bank accounts having been frozen by the tax authorities.”

“We would like to emphasize that all our flights will continue to operate as per the schedule.”

The development comes after the airline was suspended by IATA Wednesday for failing to settle its dues since February. The move is akin to the Reserve Bank of India (RBI) removing a commercial bank from its currency clearing system.

The decision to suspended the carrier came hours after the Income Tax Department froze 19 more bank accounts of the Vijay Mallya-led carrier for non-payment of dues.

According to industry experts, Kingfisher’s suspension is expected to affect nearly 30-35 percent of its business.

The move has also put a question mark over whether tickets for the carrier can now be booked using globally interconnected systems like Galileo, Sabre and Amadeus.

IATA had previously barred Kingfisher from its international ticket clearing house (ICH) system on Feb 2, but reinstated it eight days later after some payments were made.

IATA further said that the passenger carrier will not be able to settle its transactions with other ICH-member airlines. However, despite the suspension, airlines can continue to function by settling bilaterally with other airlines.

Kingfisher’s woes were exacerbated Feb 18 when its employees in Kolkata went on a flash strike as they had not received their salaries for several months.

The airline, which later curtailed its flights, blamed the seizure of its bank accounts in February as the main hurdle in clearing its dues.

Kingfisher has a debt of Rs.7,057.08 crore. Its net loss widened to Rs.444.27 crore for the quarter ended Dec 31, 2011, from Rs.253.69 crore in the October-December quarter in the last fiscal.