Kingfisher Airlines: Will it fly on?

After two rounds of talks in Mumbai on Monday, Kingfisher CEO Sanjay Aggarwal today sent a letter to the staff saying the March 2012 salary will be paid on or before October 25. "We have urged them to accept our offer and should they agree, they will receive the April 2012 salary on or before October 31 and the May 2012 salary before Diwali," he said in the letter. The employees, however, were little convinced by the new mail. The employees, who held meetings in Delhi, Bangalore, Chennai and Mumbai, rejected the offer. They allege that the management, by posting such mails to individual employees, was "trying to break our unity". The management has asked the employees to respond to its offer by October 26. Kingfisher's 4,000 employees haven't been paid in seven months, triggering the latest strike which has snowballed into a situation that has put a huge question mark on the airline's fate. Civil Aviation Minister Ajit Singh seemed to sound the death knell when he told NDTV on Monday, "It is unrealistic to expect Kingfisher to fly again." The minister also said, "Kingfisher has taken its employees for a ride." However, the airline, which had its licence suspended on Saturday, hopes to fly again. The licence was suspended as the airline failed to address the concerns of aviation regulator Directorate General of Civil Aviation (DGCA) about its operations; the move forced the debt-laden carrier to stop taking bookings. Sources say the airline is prepping the revival plan that the DGCA had sought and aims at submitting it before November 6. Controlled by Vijay Mallya, Kingfisher's fleet has been grounded since the start of the month after a staff protest. Kingfisher owes Rs 7,500 crore in debt to a consortium of 17 banks, led by the State Bank of India. The lenders together hold around a 23 per cent stake in the airline since March, after the banks converted their Rs. 6,500 crore of recast debt (after a corporate debt restructuring, or CDR, in November 2010) into equity. The company's steep decline has underlined the problems of operating in India's airline sector, where players grappling with rising fuel costs face aggressive pricing caused by overcapacity. Kingfisher's troubles will likely help rivals such as Indigo and SpiceJet by lowering capacity on key routes. The Centre for Asia Pacific Aviation has said a fully funded turnaround for Kingfisher would cost at least $1 billion. Kingfisher's bankers, which have over Rs 7,500 crore locked in the ailing airline, will soon meet to chart out the future course of action, said PNB Chairman and Managing Director K R Kamath today.

Kingfisher Airlines: Will it fly on?

NDTV Profit

NDTV Profit

Follow Us

DISCOVER US FASTER

DOWNLOAD THE APP