Airline cannot be turned around, say bankers
Passengers flying Kingfisher Airlines may continue to face hardships in the coming days. On Saturday, the airline cancelled several of its regular flights as employees decided to stay home, protesting non-payment of wages for the past five months.
While the airline did not specify the number of flights affected, sources indicated that over 30 flights were not operated on Saturday. At least 12 flights out of Delhi, 18 from Bangalore and four from Mumbai were cancelled. The airline offered the affected passengers a full refund. The airline currently operates around 100 daily services — down from over 400 at the beginning of the year.
Letter to staff
In a statement on Saturday, the airline said that 25 per cent of the staff who had not been paid were assured of payment by July 16. “But despite this, a section of employees decided to stay at home,” the statement said. In the first week of July, pilots had threatened to go on strike over non-payment of salaries. The strike was called off after the management promised to pay salaries from July 6.
Meanwhile, the airline’s Chairman, Mr Vijay Mallya, is believed to have written to his employees saying “one of the main reasons that has motivated me into investing more money to keep Kingfisher flying is that I see light ahead. I invite you to share my confidence and work towards realising that light.”
The cancellation of flights comes days after the former Director-General of Civil Aviation, Mr E.K. Bharat Bhushan, is believed to have made a noting on a file asking Kingfisher to pay back-wages and vendors’ dues in the next 15 days or face closure. Mr Bhushan was moved out of the DGCA soon thereafter, while the Government denied that any such file noting existed.
No profits
Kingfisher Airlines owes Rs 6,500 crore to 17 banks and reported a loss of Rs 1,151.52 crore during the fourth quarter last fiscal. The airline’s stock closed at Rs 10.33 on the Bombay Stock Exchange on Friday. The airline has made no profits since its launch in May 2005.
With the airline reportedly defaulting on lease rentals of over Rs 1,000 crore, lessors recently repossessed 34 of its aircraft.
Bankers say that, given its current fleet strength and truncated schedule, the beleaguered airline cannot be turned around. Debtor-creditor meetings held so far have not yielded results.
Meanwhile, on Friday the new DG, Mr Prashant Sukul, in a meeting with airline CEOs, told them to ensure timely payment of salaries to employees.
nivedita.ganguly@thehindu.co.in
Comments:
why strike every day. it causes problem not only for individuals life but growth of economy and disturb more people's life.
Dear Mr. Pilots, Please help Mr. Mallya to run his charity business without salary. phew
Sir,AS seen form the recent hapenings in the kF Airlinesthe operations were,not as perschedule,and somecancllations are alsoseen owing to financial problems and poilets strike.The poilets knew well the co.is not earning any profits,since day one, and the management has been paying them,out of borrowings.The lenders have been pressing for repayments one side, and cancellation of flights on account of strike by poilets on other side does not help improve the finances.Asper indications.Mr.Mallya though,not earned throuh Air Lines,still he is fighting hard to continue the co.Those,associated with KF should stand strongly behind him, and support him morally.I agree the employesarenotrich,but,the welfare of employees depends on the health of comany. So.please bear with the situation,and do not drive the position from bad to worstbystrikes.your help will give mrMallyajia himalayan boost,and hewill strive to bring back the stalled operationsngtonormallevels with the reputation he is enjoying
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