India's Kingfisher Airlines grounds fleet, cancels flights

India warned it would not allow Kingfisher Airlines to fly if saftey rules were not followed.

NEW DELHI // Labour unrest forced India's Kingfisher Airlines to cancel all its flights yesterday in the latest blow to the ailing carrier as it scrambles to find an investor, sending its stock down by its maximum daily limit.

India warned it would not allow Kingfisher to fly if safety rules were not followed, and the industry regulator will meet company executives today to discuss safety issues, said Ajit Singh, the civil aviation minister.

Kingfisher, controlled by liquor baron Vijay Mallya and once India's second-largest carrier by domestic market share, has struggled with its US$1.4 billion (Dh5.1bn) debt and banks have refused to lend it more unless it can infuse fresh equity.

The carrier, which has never made a profit, had already grounded most of its fleet.

"A section of employees of Kingfisher Airlines has not been reporting for work over the last two weeks, and over the past two days they have been threatening and even manhandling other employees who are reporting for work," said a Kingfisher spokesman, Prakash Mirpuri, yesterday.

Kingfisher, which is months behind on salary payments, has seen its operations disrupted several times by fed-up employees.

"The point is if safety is jeopardised. That's the issue here," Mr Singh said yesterday. "This is the first time that a safety issue has come up."

* Reuters