Kingfisher extends lockout, faces licence cancellation

Published: 05th October 2012 04:13 PM  |   Last Updated: 16th October 2012 11:58 AM   |  A+A-


Debt-ridden Kingfisher Airlines hurtled towards a dead-end Friday as the carrier grounded its fleet for another week and the aviation regulator sought legal opinion on cancelling its flying licence.

Late Thursday night, the airline said it was extending to Oct 12 the lockout declared Oct 1 after negotiations with the striking employees failed amid reports that airline is not in a position to pay the full salaries to its employees since the lenders have refused fresh funding.

Spelling more trouble for the beleaguered airline, Civil Aviation Minister Ajit Singh said the carrier will not be allowed to fly if it fails to satisfy mandatory safety norms.

"In order to give them (Kingfisher Airlines) permission to fly again, they have to satisfy the DGCA (Directorate-General of Civil Aviation) on all safety issues and get all their employees back," Singh told IANS.

"We will have to see the legality of the move to suspend or cancel their licence," the minister said, adding that the regulator could send a showcause notice to the airline.

Singh has said the ministry would consider both the finances as well as the employees' views before allowing the airline to function. "There are a lot of factors involved... the salaries of the employees and other issues. If the employees are disgruntled, there is an issue of safety."

In Mumbai, the agitated employees, including pilots, engineers and technicians took out a procession Friday morning to the airline's office,insisting that their pending salaries and other dues be immediately paid.

"We are making three demands - salary, salary, salary. Everything will be normal as soon as the management clears our pending dues since we are not able to run our households," a pilot taking part in the procession told IANS.

On Thursday, an airline staffer's wife committed suicide in New Delhi, citing economic woes.

The situation at the airline has not improved even after the regulator hauled it up after it cancelled all 50 flights Monday as employees went on strike Sunday, demanding payment by Oct 5 of their salaries, pending since March.

Key personnel like aircraft maintenance engineers, whose aircraft airworthiness clearance is mandatory for any flight to take off, also struck work.

The employees claim that non-payment of salaries has affected their morale and built up stress levels that can also affect operational safety.

The airline had the lowest market share in August, which stood at 3.2 percent. The airline has a total debt of Rs.7,000 crore from a consortium of banks.

According to a report by the Centre for Asia Pacific Aviation (CAPA), Kingfisher Airlines may have to shut down operations if $600 million is not infused in it in the next two months.

The company reported a net loss of Rs.650.78 crore ($117 million) for the quarter ended June 30.

Currently, the airline has only 10 operational aircraft from an earlier strength of around 66 planes a year ago. It was also the country's second largest airlines by passenger traffic.

The company's scrip at the Bombay Stock Exchange (BSE) fell by 4.68 percent and stood at Rs.13.25 Friday from its previous close at Rs.13.90.


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