The Directorate General of Civil Aviation (DGCA) has rejected Kingfisher Airlines' (KFA) revival plan that it had submitted to the aviation regulator this month, NDTV has learned.
Kingfisher had requested renewal of its operating permit with the help of funds from its parent UB Group. The cash-strapped airlines owes over Rs 390 crore, including penal interests to the Airports Authority of India (AAI).
"Financial aid of Rs 650 crore from parent company is not sufficient to restart operations. Details on fund infusion,clarity on how and when fund will infused is still not convincing by Kingfisher." sources told NDTV.
Sources in DGCA say Airports Authority not convinced over payment of dues by the airline .
The airline has been grounded since October 2012 following unrest by employees and a subsequent disruption in its flight schedules. Its flying licence was suspended last December, and the airline has two years to get it renewed.
The DGCA had sought a written commitment from the promoters of the airline that additional funds for the airline will be infused by the parent company.
In February this year, lenders to the airline decided to start recalling their loans to Kingfisher, following which parent UB Group said it is in talks with the lenders to cut their exposure by using the proceeds from the stake sale in United Spirits, also a UB Group company, to Diageo for $2.1 billion (Rs. 11,451.43 crore). The deal was announced in November 2012.
With inputs from agencies