Air India and Kingfisher Airlines in trouble

11 accounts of Air India and 10 accounts of Kingfisher Airlines were frozen by the Service Tax Department. This was done in view of default on service tax payments.

According to the Commissioner of Service Tax in Mumbai, Air India owes Rs. 150 crore while Kingfisher owes Rs. 70 crore. The commissioner further alleged that both had defaulted in paying in the money that they had already collected in the name of service tax from their customers.

Both companies are already badly debt-ridden.

It is reported that Vijay Mallya the liquor baron and promoter of Kingfisher Airlines, may be trying to sell Kingfisher House to raise funds, whereas the government owned Air India is expecting the Government of India to cough up the funds to enable it to survive.

The debt of Kingfisher is a whopping 12,000 crore, while Air India is sitting on a even bigger debt of 62,000 crore.

Private Airlines announce one-day strike

The International Air Transport Association (IATA) announced international scheduled traffic results for June

...showing passenger demand declining 7.2% compared to the same month in the previous year while freight demand was down 16.5%. International passenger load factors stood at 75.3%, down from 77.6% recorded in June 2008.

IATA

This private airlines have called for a one day strike.

...they will suspend domestic operations for on 18 August 2009 to press for their demand of the government relief.
...
The airline industry has witnessed a dip in passenger traffic for the last. This dip coulpled with low fares and high fuel costs is taking its toll on the health of airline industry as a whole.

MeraBsp

The private operators want the government to intervene and come up with some relief measures. It may be noted that the government owned Air India is already in trouble due to its huge losses.