Kingfisher suspended from IATA clearinghouse, delayed from oneworld

Kingfisher was dealt a potential death blow yesterday when the airline was suspended from IATA’s ticketing clearinghouse due to reported non-payment. The clearinghouse is used by hundreds of airlines to process payments for interline tickets and other multi-carrier transactions. Roughly 80% of interline transactions worldwide are settled through the system so being suspended is a huge blow to the carrier.

The company claims the suspension was triggered automatically by the IATA systems when a technical glitch prevented their scheduled payment from reaching the clearinghouse:

As a result of a recent internal system failure, certain credits did not hit our ICH account in time, triggering an automatic suspension. Kingfisher would like to confirm that all its dues via ICH have been settled in full and it has absolutely no outstanding due as of date,

Despite claiming to be current it appears that IATA has not yet commented or reinstated the carrier to the systems.

Adding fuel to the fire is the announcement today that the planned February 10, 2012 ascension of Kingfisher into oneworld is being delayed, with no revised date yet announced. FlightGlobal is carrying the story, with quotes from both oneworld and Kingfisher executives on this latest development. Said oneworld CEO Bruce Ashby:

These are turbulent times for the airline industry in India and many other parts of the world. We have been working closely with Kingfisher Airlines over the past months and it has become increasingly clear recently that the airline needs more time to resolve the financial issues it is confronting before it can be welcomed into Oneworld. Will work with Kingfisher Airlines with the aim of setting a new joining date once it is through this current period of turbulence.

This delay is somewhat reminiscent of the frequent delays that Air India suffered in their attempts to join Star Alliance over the past few years. Those efforts were eventually scuttled after multiple delays.

Without access to interline booking revenue is seems unlikely that Kingfisher will be able to realize the revenue needed to pull themselves out of their financial morass. With many unpaid or severely delayed bills the future of the carrier is very much in question. It is not surprising that the alliance is not interested in bringing the carrier on board as their liabilities for interline travel could be significant.

This is a serious blow for oneworld, as another member carrier, Malev, ceased operations today, also under financial pressures they could not overcome.

Not a good day in the aviation world at all.

Hat tip to Flying With Fish for the head’s up on this one.

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10 Comments

Thanks for the info…

What is the liklihood / possibility that a Cathay, Qantas, or JAL would reevaluate their membership in OW?

Would any of them believe that they could find a better home with Star or Skyteam?

Would Skyteam or Star members agree that some of these OW members would be a good addition to their alliance, without too much overlap / conflict?

with AirChina being in StarAlliance, Star may attempt to influence them to convince CathayPacific to jump ship

CX currently doesn’t overlap with much of Star (except semi-proximity with Thai, but they target different markets anyway)

Of the three airlines, the possibility you mention (CX to *) would be by far the most attractive to me as a UA / *A flyer….

Qanatas / AA / BA will never leave OW…

* already has acceptable coverage for the Australia / NZ, and Japan, with existing partners.

Seth says:

4 February 2012 at 1:12 pm

CX moving over to *A would be a huge blow to oneworld but unless SQ somehow got itself out of Star Alliance I just don’t see it happening, short of oneworld completely dissolving.

Star is OK in Oz but getting Virgin Australia would be a HUGE win for either *A or SkyTeam.