Saturday, March 3, 2012

Day 248

For the last two days, I’m writing about the crisis of Kingfisher airlines. As I was writing those posts, the service tax department under the Finance Department was busy in freezing 40 bank accounts of Kingfisher airlines. Kingfisher airlines has the 40 crore due of the service tax department. Actually the total service tax dues of Rs 70 crore. Out of which Kingfisher airlines have promised to pay Rs 20 crore by February 29. As the Kingfisher airlines is cash strapped and there is no hope of getting any fresh loan and the extension of the present loans, the airlines is unable to pay its dues to the service tax department. This is not the first time when the accounts of the Kingfisher airlines have been frozen. In December and in January also, the accounts were frozen. But that time, the airlines has paid its due over Rs 30 crore and Rs 10 crore respectively. The airlines is in such a mess that it is unable to pay it’s obligations including salaries to its staff. Over 60 pilots have resigned the airlines on the non payment of salaries to them. Due to this, the operations have been severely affected. Previously it was operating 400 flights a day. Now it has gone down to 170 flights a day. Last week, a section of engineers went on a day’s strike for the non payment of salaries. The airlines urgently need Rs 2000 crore working capital to be in the business. 

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Day 433

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