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Will DGCA revive KFA's licence as employees return to work after 25-day lockdown?

CNN-IBN
Oct 26, 2012 at 10:47am IST

New Delhi: The month-long stalemate at Kingfisher Airline ended on Thursday just in time for Chairman Vijay Mallya to make his appearance at the Indian Grand Prix in Greater Noida. The pilots and engineers with the cash-strapped airline will resume work after the management agreed to pay their four-month salary dues.

After 25 days of protest, a lockdown and a suspension of license, the airline is limping back towards normalcy. The airline management is expected to meet the Directorate-General of Civil Aviation (DGCA) on Friday after its employees finally agreed to return back to work.

Kingfisher Airlines CEO Sanjay Aggarwal is scheduled to meet the DGCA officials later on Friday to present a roadmap for the revival of the airlines. The airline engineers have to clear the aircraft for airworthiness and the company has to prove there is no dispute with employees and that all arrears are being paid.

However, resumption of Kingfisher's flight operations may take at least 3-4 weeks as the airline would have to get the suspension of its flying license revoked by the DGCA which also has to satisfy itself on safety issues as well as the viability of their financial and operational plans. After separate rounds of meetings with agitating pilots and engineers in New Delhi, the airline management agreed to pay the March salary within 24 hours, the April salary by October 31, May dues before Diwali in mid-November and June salary by December end.

Soon after the agreement with the employees was arrived at, Mallya said in a tweet, "All Kingfisher Team members back at work and fully supportive. I sincerely thank all of them for their faith and continuing commitment." Asked whether the 25-day lockout has been lifted, an airline spokesperson said, "yes, with immediate effect."

Later in a statement, he said Kingfisher "is pleased to announce that all of its employees have agreed to resume work and report for duty immediately. All employees are now eagerly looking forward to working together in order to re-starting operations very soon. "We will now finalize and present our resumption plan to the DGCA and hope to get their concurrence soon."

Under the agreement, the management, which was earlier offering only three month salary dues, climbed down to accept the workers' demand for payment of four out of seven months' dues by December end. The salary dues from July to September would be paid by March next year after recapitalisation of the airline, an engineers' representative said, adding that CEO Sanjay Aggarwal had also said that recapitalisation of the beleaguered carrier "will be done in 5-6 months."

All Kingfisher flights have remained suspended since September 30 due to the strike, followed by a lockout from October one and then suspension of their Scheduled Operator's Permit (SOP) or the flying license by aviation regulator DGCA. The license of Kingfisher was issued on August 26, 2003, and is valid till December 31, 2012.

The carrier, which early in 2011 had a fleet of 66 aircraft, now has ten including seven Airbus A-320s and three ATR turbo-props. It is saddled with a loss of Rs 8,000 crore and a debt burden of another over Rs 7,524 crore, a large part of which has not been serviced for several months.

Earlier, Civil Aviation Minister Ajit Singh said while salary was "a big issue and the employees should be paid, the bigger issue than that is the airline's fiscal assurance to the DGCA.. They have lot of outstandings to the Airports Authority (of India), to companies, to lessors, so its not just a question of salaries to the employees."

Singh said their flying license, though suspended, is "still there but to allow them to fly again, the DGCA has to be satisfied on many more things." The airline has to present a viable operational plan to the DGCA. Noting that the airline had not yet submitted any revival plan to the DGCA, Singh said, "It is not a question of me being hopeful or not, in my view, its a very difficult proposition but not impossible."

On Thursday, the employees relented to the proposal of a three-month salary by Diwali. Mallya will be landing in Delhi on Friday but will be heading straight for the Indian Grand Prix. The question ofcourse remains whether just the payment of salaries will be enough for Kingfisher to take flight once again.

With Additional Inputs from PTI

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