ibnlive » India

Oct 22, 2012 at 09:52am IST

KFA crisis: Management to make last attempt to convince employees to return to work

Mumbai: Facing the real possibility of a shut down, cash-strapped Kingfisher Airlines will make one last attempt to convince its 4000 employees to return back to work on Monday. The management is slated to hold talks with them in Mumbai. This comes three days after the Directorate-General of Civil Aviation (DGCA) suspended its licence - putting the airline in further jeopardy.

The employees have been seeking payments of all pending dues - they haven't been paid for seven months. But the management has so far offered just a month's salary. Sources said that if talks fail on Monday, striking employees will launch a nationwide protest and try and confront Chairman Vijay Mallaya at the F1 track in Greater Noida, where the races begin on October 26.

"We will hold a meeting with the management tomorrow (Monday) in Mumbai. We also want the airline to start operations and to become viable again," a senior official who is on strike said in New Delhi. "We will consider any offer presented by the airline which is logical and meets the minimum criteria of our demands," the official added. Nearly, 6,500 employees of the airline face the possibility of losing their jobs if the airline continues to be in a state of lockout, which has been extended till October 23. The average monthly wage bill of the airline is said to be around Rs 21 crore.

The DGCA had issued show-cause notice on October 5, to the liquor baron Vijay Mallya-owned airline asking why its flying licence should not be suspended or cancelled as it was not adhering to its flight schedule and "abruptly cancelling its flights time and again during the last 10 months", causing great inconvenience to the travelling public. The DGCA had given the airline a 15-day time to reply to its notice, which was to expire on Saturday.

Kingfisher was issued an airline licence on August 26, 2003. It was actually issued to Air Deccan which was bought over by Kingfisher. It is valid till December 31, 2012.

The sources said Kingfisher was on cash and carry by most service providers and the government did not want a situation where the airline re-starts operations and then keeps flying in fits and starts, as has been happening since last year-end. In the latest instance, its pilots and engineers went on strike from September 30 to protest against non-payment of salary since March. The airline then declared a lockout on first till October 4 and then extended it till October 20. It as further extended till October 23 on Friday.

Kingfisher, once India's second-biggest airline, last week extended what it has described as partial lock-out until October 12. India recently allowed foreign airlines to buy a maximum 49 per cent stake in local carriers, a move long lobbied for by Kingfisher, although no airline has publicly expressed an interest in investing in Kingfisher.

Kingfisher has been saddled with a huge loss of Rs 8,000 crore and a debt burden of over Rs 7,000 crore, a large part of which it 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. Kingfisher's net loss in 2010-11 was Rs 1,027 crore and it doubled to Rs 2,328 crore in 2011-2012. The airline also owes money to 17 banks.