An official financial audit of all Indian carriers has found that safety issues were being neglected by some of them due to serious financial distress and suggested stringent action, including cancelling of flying permits, against two major carriers.

The financial surveillance report of the Directorate General of Civil Aviation (DGCA), which carried out an audit of the airlines, has found widespread sickness in the sector and suggested strict measures like cancellation of permits or slashing of flights, apart from rectificatory measures to resolve lapses.

This is the first time that such an exercise has been carried out by the DGCA. The audit was conducted following recommendations of the Civil Aviation Ministry's Safety Advisory Council.

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Among the airlines which faced the wrath of the regulator are Kingfisher Airlines and Air India Express, but all other carriers, barring Air India, have also faced severe rap.

Sources in the know said Kingfisher and AI Express have been called for a meeting while explanation has been sought from other carriers.

For Kingfisher, the report said, "A reasonable case exists for withdrawal of their airline operator permit as their financial stress is likely to impinge on safety."

On AI Express, it said, "A prima facie case exists for restricting their operations in view of safety issues."

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The sources said audit investigations were still in progress and the report would be given a final shape on receipt of the version of all the airlines.

The audit carried out over a period of 3-4 months found shortage of senior commanders, pilots and cabin crew, lack of adequate training, scarcity of aircraft engines, components and crucial spares.

The airlines would be given time to fulfill all safety obligations, meet the criteria and ensure that safety was not impinged at any cost, the sources said.