Kingfisher crisis deepens as talks fail

Published: 03rd October 2012 06:01 PM  |   Last Updated: 16th October 2012 11:58 AM   |  A+A-


The crisis in Kingfisher Airlines worsened today as reconciliatory talks between the management and striking engineers and pilots over payment of seven-month salary backlog failed with the protestors rejecting the offer of part payment and vowing to continue their agitation.

With no end to the deadlock, a question mark hung over the airline's plans to resume operations from Friday, after a four-day partial lockout and complete suspension of all operations since Monday night.

"Our strike will continue as management has failed to give any commitment on payment of salary," a representative of striking Kingfisher engineers and pilots, Capt Vikrant Patkar, told reporters after a brief meeting in Mumbai.

On its part, the management offered to pay one month's salary soon and "expedite the payment of the remaining six months as soon as the company gets recapitalised," an airline official said on condition of anonymity.

But this offer was rejected by the employees. "There is no money and they can't give any commitment also. The engineers and pilots will continue with their agitation," Patkar said.

He said the management "offered us one month salary and that too 10-15 days later. We are not going to work unless we are paid for 7 months. So we have rejected their offer."

Top Kingfisher officials had promised aviation regulator DGCA that they would hold meetings with various sections of the staff in an attempt to end the strike and the process began today.

Airline CEO Sanjay Agarwal and UB Group's Chief Financial Officer Ravi Nedungadi attended the meetings with the commercial staff as well as engineers and pilots in Mumbai.

They are expected to meet the employees in Delhi tomorrow.

Earlier in the day, Civil Aviation Minister Ajit Singh said the Directorate General of Civil Aviation (DGCA) would submit an interim report on the situation facing Kingfisher, including the safety issue as aircraft engineers were on strike.

Kingfisher has been saddled with a huge loss of Rs 8,000 crore and a debt burden of another over Rs 7,000 crore, a large part of which has not serviced since January.

Several of its aircraft have been either taken away by its lessors or grounded by the Airports Authority of India for non-payment of dues during the past few months.

In the event of Kingfisher resuming its operations, it would have to seek the nod of the DGCA, which has asked the crisis-ridden carrier to submit a report on airworthiness of its aircraft, among other things, the Minister said.

He said the Vijay Mallya-owned carrier was facing serious financial crunch and DGCA would have to be satisfied on all aspects of operational safety till it allowed resumption of flights.

Based on the inputs received from the airline and its own findings, DGCA would submit an interim report on its safety parameters and a final report in the next few days.

"We will only then take a decision on the airline's operations," the Minister said, adding that he had "no idea" on the implications of the safety issues on Kingfisher's flying licence as of now.

After declaring a partial lockout till October four following the strike by engineers and pilots over non-payment of salary, airline CEO Agarwal had expressed confidence about resolving the situation in the next few days. "We will take a call on October four on resumption of our operations."

The airline would be using its current fleet of ten aircraft -- seven Airbus A-320s and three turbo-prop ATRs, to resume flights. With these planes, Kingfisher has been operating about 70-80 flights each day till it suspended all operations on Monday night.

Over 80 pilots and 270 Kingfisher engineers have been on intermittent strikes over the past few months, primarily over delay in payment of salaries.

On infusion of funds, Agarwal had said the airline was "re-engaging with (foreign) airlines and non-airline investors with whom we had been speaking earlier. There is very serious interest in Kingfisher."

However, "it will still take 3-4 months to get the money into the airline, given the complexity of transactions. But we are confident that this will materialise soon," Agarwal said, adding "our promoters and the UB Group have put in Rs 1,150 crore over the past five months."

About the airline's talks on de-freezing of bank accounts by the Central Board of Direct Taxes and Central Board of Excise and Customs, he had said, "We are hopeful that the issues will be resolved in the next few days."

About Rs 60 crore are stuck in these accounts, which would go a long way to clear salary and other dues, he had said.


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