As a result of the findings, in a first, 13 of the 71 passengers who were wrongly denied boarding passes were compensated in the range of Rs 3,000 and Rs 5,000, apart from a full refund.

The airlines, including Kingfisher, SpiceJet, IndiGo Airlines and Go Air, faced delays of over two hours in August. While the four airlines have a combined market share of 54.7%, Jet-JetLite and AI (domestic) that enjoy the remaining 45.3% domestic slice have not said how many of their flyers faced delays of over two hours.

Industry sources say these numbers could have crossed a lakh had the two majors, Air India and Jet, complied. Jet, like other airlines (except AI), admits to providing meals and refreshment to passengers inconvenienced by delays. Some said they put delayed passengers on other flights.

Similarly, 5,178 domestic passengers who were supposed to be airborne in August were left stranded by sudden cancellations. Kingfisher Airlines, SpiceJet and Go account for this collective figure. Interestingly, Jet and JetLite have told the aviation ministry that none of their passengers were affected by cancellations.

This despite the fact that DGCA figures show the overall industry flight cancellation rate was 3.1% last month. But JetLite and Jet topped this list with 10.5% and 6.6%, respectively, of their flights being cancelled. DGCA is going to seek an explanation from Jet on this.

And, finally, of all domestic airlines, only Kingfisher admitted to having denied boarding to 71 passengers. AI did not give any figure. Denial of boarding occurs when airlines overbook to make up for last-minute no shows. Kingfisher told the government that 13 such passengers were refunded and compensated while the rest 58 were accommodated on other flights.

Jet Airways (India) Ltd, the country’s largest airline by passengers carried, is converting at least 63 flights under low-cost brand Jet Airways Konnect into full-scale Jet Airways flights.

Kingfisher Airlines Ltd’s low-fare service Kingfisher Red is offering services usually associated with premium travel to front-row passengers, an airline official said.

Full-service flights offer economy class and the costlier business or first class and provide special meals and extra leg room for passengers travelling in the latter.

Airlines had started relying more on low-cost operations, which are typically without any frills, during the economic slowdown that followed the global financial crisis of 2008. Jet Airways introduced Konnect in April 2009, offering tickets 10-15% lower than the economy fares of the full-scale carrier.

A code sharing agreement allows one airline to use another’s flight code on its own ticket, thus allowing its passengers to travel on the other airline’s flights. Such a move helps carriers to expand their network without actually incurring costs of deploying its own fleet.

“The codeshare with British Airways will mean that our guests from India will now be able to fly seamlessly to nine new European cities,” said Vijay Mallya, chairman and chief executive, Kingfisher Airlines.

According to the airline, its code will be placed on nine BA routes from Heathrow to the British region and continental Europe, while BA’s code will be placed on 11 domestic Indian routes and one route to Sri Lanka operated by Kingfisher Airlines Flights.

This is the first time that BA has entered into a code sharing agreement with an Indian airline.

The numbers also showed that the so-called ‘low cost’ airlines, such as SpiceJet and IndiGo Airlines, were much better at making timely payments for their fuel that the two ‘full service’ airlines that charge higher fees from passengers.

SpiceJet Airlines owed just Rs75 crore, followed by GoAir and South India-focused Paramount Airways with Rs19 crore each and IndiGo with just Rs 60 lakhs, according to the minister.

The biggest creditor to private airlines was Indian Oil Corporation, the country’s largest oil retailer. Jet accounted for Rs830 crore out of the Rs954 crore worth of exposure the company had to the sector. IOC was followed by Hindustan Petroleum, which had exposure of Rs555 crore, out which Rs536 crore was owed by Kingfisher Airlines. BPCL had an exposure of Rs378 crore, taking net outstanding by all three firms to Rs1,888 crore.

He was replying to question on how much dues the airlines owed to public sector oil companies like Indian Oil Corporation (IOC), Bharat Petroleum Corporation Limited (BPCL), Hindustan Petroleum Corporation Limited (HPCL).

According to Patel, Jet airways led the defaulters pack with Rs 960.15 crore, followed by Kingfisher Red Airlines(Rs.814.49 crore), Spicejet (Rs 74.5 crore) and Paramount Airways (Rs 19.28 crore).

Asked whether the oil companies were losing money due to this, the minister said: “Holding up of payments by the private airlines do not add to the losses of oil marketing companies (OMCs) as interest is being recovered on overdue payments.”

He added that if the airlines fail to pay their dues the OMCs can take actions like putting the defaulting airlines on a “cash and carry” basis.

HPCL last month had put Kingfisher airlines on a “cash and carry” basis.

“In case OMCs fail to recover their outstanding dues, OMCs resort to take legal route by filing suit against the defaulting airlines in the country of law for recovery,” Patel added, referring to the HPCL and Kingfisher case which went to court in 2009.

The court ordered the airline to pay all its dues by November 2010.

“It will enable us to align processes and systems to meet Star Alliance standards. Air India will then be able to leverage the complementary strengths and synergies of the single new carrier to the maximum, resulting in a more competitive, customer friendly and world class airline with significant improvement in our passenger yields,” said Arvind Jadhav, chairman of the National Aviation Company India Ltd (NACIL), which operates Air India.

“The deal is valued at $190 million over ten years,” he said.

Jadhav said the technology upgradation would help complete the merger of Indian Airlines with Air India.

“SITA’s services will be used to deliver a single airline code to allow the seamless integration of the former domestic carrier Indian Airlines with Air India for the first time since they merged in August 2007,” he added.

In addition, SITA will also implement an efficient online booking engine, departure control system, check-in and automated boarding control, baggage reconciliation system and a frequent flyer programme, the airlines said.

Captains of the airline industry met in the Capital on Wednesday and have arrived at an informal understanding to avoid undercutting, the sources said.

Jet Airways chairman Naresh Goyal, Kingfisher Red chairman Vijay Mallya, Arvind Jadhav of Air India, Rahul Bhatia of IndiGo and Sanjay Agarwal of SpiceJet were among those presentat the meeting of the Federation of Indian Airlines.

All the airline companies said there was no joint decision on fares, but the sources said the denial was due to the fear of cartelisation charges, which would invite the wrath of the government and regulators.

Mr Goyal and Mr Mallya said the meeting discussed industry issues like the new ground handling policy. Airlines should be allowed to continue self-handling and the issue would be taken up with the concerned authorities, they added.

The proposed fare revision would be effected by tweaking the yield management system of airlines, the sources said. The number of seats sold through the lower buckets would be cut sharply and discounts would be rolled back to the minimum, they added.

All the passengers and crew were safe, they said.

The Jetlite flight S2364 which took off from the airport at 5:15 pm returned just 15 minutes later after a technical problem developed in the engine following a bird-hit, the officials said.

The pilot contacted the ATC for making an emergency landing. The airport authorities made all arrangements for the emergency landing with fire tenders, medical van, doctors and police van, they said.

The aircraft, on its way from Port Blair to Bangalore via Kolkata, was taken for repairs after the passengers disembarked, they added.

SpiceJet and GoAir have an agreement of exclusive negotiations till March 2010 to execute the deal. One of the key stumbling blocks was the amount of unsecured loans on GoAir’s balance sheet, said the first person on conditions of anonymity. The other executive said the two companies were close to signing a memorandum of understanding three weeks ago but could not agree on a share swap ratio to execute the transaction.

A spokeswoman for GoAir said the talks of a proposed merger was baseless. She said GoAir has categorically stated that the decision taken by the board of the company is not to proceed with any such proposal and focus on its plan to raise its fleet size from of eight to 12 aircraft.

Repeated attempts to contact SpiceJet officials and a detailed email query to the company did not elicit any response. ET NOW has learnt the cashless transaction was to be executed through a share swap agreement between the promoters of GoAir and its shareholders and the promoters of SpiceJet and its shareholders. Rothschild & Sons is the advisor to the proposed transaction.

As per the proposed transaction, shareholders of GoAir were to be issued shares of SpiceJet based on an agreed value as determined by the share swap ratio. After the valuation agreement, the boards of the two companies were to approve a scheme of arrangement.

The transaction structure also proposed that all sponsored loans, quasi-equity and unsecured loans on GoAir’s balance sheet be converted into equity prior to the consolidation transaction.