After suspending cash-strapped Kingfisher Airlines from its inter-airline transaction body, the International Air Transport Association (IATA) Friday barred the carrier from the billing and cargo settlement systems, even as the airlines made alternate arrangements for selling its tickets.
"IATA has suspended Kingfisher Airlines' participation in billing and settlement plan (BSP) and cargo accounts settlement system (CASS)," an IATA official said here.
"The suspension was because the airline did not provide IATA with a cash deposit, required to continue its participation in the BSP and CASS."
The move is akin to the Reserve Bank of India (RBI) removing a commercial bank from its currency clearing system. The development comes after the airline was suspended by IATA Wednesday for failing to settle its dues since February.
Both the programs facilitate in selling and remitting proceeds between airlines and travel and cargo agents.
"The airline is still free to sell and settle directly with travel agents and freight forwarders, the IATA official said.
Meanwhile, the cash-strapped airlines said that it has made alternate arrangements for selling its tickets.
"As a result of the recent suspension of Kingfisher Airlines from IATA's ICH (IATA clearance house) and BSP (billing and settlement) platforms, the airline has made alternate arrangements to ensure that the customers can continue to book their travel on Kingfisher, via select leading travel agents," an airline official said.
The airline further said it was unable to pay its dues to IATA because its bank accounts were seized Wednesday by the Income Tax Department, with whom the carrier is negotiating.
"This situation has arisen as a consequence of our bank accounts having been frozen by the tax authorities. We would like to emphasize that all our flights will continue to operate as per the schedule."
The decision to suspended the carrier from ICH on Wednesday came hours after the Income Tax Department froze 19 more bank accounts of the Vijay Mallya-led carrier for non-payment of dues.
According to industry experts, Kingfisher's suspension is expected to affect nearly 30-35 percent of its business.
The move has put a question mark over whether tickets for the carrier can now be booked using globally interconnected systems like Galileo, Sabre and Amadeus.
IATA had previously barred Kingfisher from its international ticket clearing house (ICH) system on Feb 2, but reinstated it eight days later after some payments were made.
Kingfisher's woes were exacerbated Feb 18 when its employees in Kolkata went on a flash strike as they had not received their salaries for several months.
The airline, which later curtailed its flights, blamed the seizure of its bank accounts in February as the main hurdle in clearing its dues.
Kingfisher has a debt of Rs.7,057.08 crore. Its net loss widened to Rs.444.27 crore for the quarter ended Dec 31, 2011, from Rs.253.69 crore in the October-December quarter in the last fiscal.
The airlines' scrip at at the Bombay Stock Exchange (BSE) was lower by 0.71 percent at Rs.20.85 per share around 2.00 pm.