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Kingfisher employees reject management's offer, want salaries by Thursday

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Oct 24, 2012 at 09:07am IST

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New Delhi: No end to the standoff between Kingfisher Airlines employees and management. The partial lockout is set to continue as the cash-strapped airlines' officials had sought time from the DGCA until Wednesday but the employees have refused a written assurance of three months salary before Diwali. They want to be paid by Thursday.

The crisis in Kingfisher Airlines following a 23-day lockout is likely to prolong with a large section of employees sticking to its refusal of the management's offer on payment of salary dues even as its owner Vijay Mallya said he was not an "absconder". The airline employees, who held meetings in Delhi, Chennai, Bangalore and Mumbai, rejected the offer of payment of three months' salaries in a staggered manner as part payment of its dues and insisted that it should be paid in lumpsum.

ALSO SEE Crisis in Kingfisher likely to prolong, Vijay Mallya says he is not an absconder

However, Mumbai-based pilots said they were ready to accept the deal offered by the management as a condition to resume work. Salaries have been pending for seven months. The airline CEO, Sanjay Aggarwal, on Tuesday sent out emails to individual employees offering them three months salary by Diwali in mid-November, saying if they accepted the offer, they should send an acceptance note and resume work from Friday, which was objected to by the protestors.

Kingfisher employees want salaries by Thursday

The 23-day lockout is likely to prolong with a large section of employees of the cash-strapped airline sticking to its refusal of the management's offer on payment of salary dues.

The staffers also objected to Aggarwal's suggestion that the employees, who would accept the offer, should send a reply to him saying, "I hereby accept the terms and conditions of the mail below and confirm that I shall be reporting to work effective October 26, 2012. I assure you that I would adhere to my duties in a manner that does not cause any further disruptions of our operations."

The CEO also told the individual employees, "Once you have sent your acceptance, you can resume duties effective October 26, 2012." Some staffers, who were in a strident mood on receipt of the offer letter, said "we cannot give any such undertaking in writing as the management has been consistently failing to deliver on their promises. The management is holding us responsible for the lockout they have declared."

An engineer, Subhash Chandra Mishra of the Engineering department in Delhi, questioned the silence of Mallya and said "the management has been shooting such letters regularly, but they have failed to honour their commitments. We reject this offer and demand a lumpsum payment of a minimum of three months' salary, if not of four months, by October 26."

Aggarwal said that 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. In essence, the Company will pay three months of salary before Diwali to these employees," he said in the letter. Aggarwal held out the assurance that the remaining backlog of salaries from June to September "will be paid once the company has been recapitalized upon equity infusion."

From December, salaries would be paid in 30-day arrears on a monthly basis. That is, the airline would pay the October salary in December, the November salary in January and

so on, the CEO said. 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.

With Additional Inputs from Agencies

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