NEW DELHI (AP) — India's cash-strapped Kingfisher Airlines said Wednesday it will cut overseas flights and return leased aircraft as part of a strategy to reduce costs.
With scores of flights canceled this week, the beleaguered airline has already returned one Airbus 330-200 to its lessor in the U.K. in an attempt to prune its loss-making overseas operations.
"Positive and immediate action is being taken on all fronts to cut costs," the airline said in a statement. "We are curtailing our wide-body overseas operations that are bleeding heavily."
Kingfisher has been struggling with a debt of $1.3 billion. It posted a loss of $90 million in the quarter ended December.
India's aviation industry has been hit by losses due to high fuel costs and fiercely competitive low fares. Five out of six Indian carriers have been making losses, which the airlines argue can only be mitigated through infusions of foreign investment. The government has been under pressure from the airlines to allow foreign carriers to buy stakes in India's cash-strapped airlines.
In the past few months Kingfisher has grounded planes, failed to pay staff and canceled flights. It has been in the red since beginning operations in 2005.
The airline canceled scores of flights this week after pilots refused to work to protest unpaid salaries.
Kingfisher chairman Vijay Mallya is scheduled to meet with the pilots on Thursday to discuss the financial crisis gripping the airline.
The airline's woes have multiplied after the company's bank accounts were frozen by tax authorities. This has held up the payment of salaries to its staff and clearing of dues to aviation bodies.
The frozen bank accounts led to Kingfisher's suspension from the International Air Transport Association's payment clearinghouse last week on account of unpaid bills.
The IATA system allows airlines to divide the money from codeshare flights or multileg journeys involving several carriers.
The airline said it was working with tax authorities to resolve the "serious handicap" that confronts it.
Kingfisher apologized to passengers whose flights were canceled and said they would be accommodated on other airlines or offered a full refund.