There has been a lot of coverage on this blog about Kingfisher Airlines’ financial woes, like this post
, and this post
. Now, Kingfisher Airlines has had a rough enough couple of days to warrant yet another post on the topic. Yesterday, it was suspended from the IATA clearinghouse. Today, it was announced that oneworld alliance is deferring its application until it can get its financial side in order. These are massive blows to Kingfisher from which it won’t recover easily from.
Yesterday, it was announced that Kingfisher Airlines has been suspended from the IATA Clearing House due to non-payment of debts. The IATA Clearing House is the way that airlines do interline and service transactions with each other. Kingfisher Airlines being suspended means that other airlines have to deal directly with Kingfisher to get payment for tickets issued by Kingfisher. That means that other airlines will find it very difficult for other airlines to accept tickets issued by Kingfisher. This will certainly have an adverse effect on Kingfisher.
However, the bigger problem for Kingfisher is the fact that their membership with oneworld is being deferred. As I explained:
Joining oneworld will help the airline in many ways. Kingfisher’s King Club frequent flyer program will be fully integrated with other oneworld partners. Earning and redeeming miles will be possible on any airline throughout the alliance, and status will be recognized by all carriers. This is expected to bring a significant number of passengers to Kingfisher from other domestic airlines, as many people want to earn miles and have their status recognized. In addition, Kingfisher will gain interline and ticketing agreements with all other oneworld partners. This means that tickets from other alliance airlines will use Kingfisher for domestic segments over competitors. Currently 7 oneworld airlines serve India. These airlines will provide feed for Kingfisher’s operations.
All of these advantages are gone with this one decision. Kingfisher will not get the loyalty of oneworld elites flying to and within India. This will hurt Kingfisher’s load factors and revenue significantly. With the cash crunch that Kingfisher is facing today, that pain will not be easy to deal with.
Kingfisher is second airline in India to have its entrance to an alliance deferred. Air India had the same issue last year with Star Alliance. Some have been saying that the Airlines of India are jinxed, and will never be able to join an alliance. Perhaps they are right…
This decision also came on the same day that another oneworld member, Malev, ceased operations. A post about Spanair and Malev ceasing operations will be posted early next week.