Kingfisher Airlines
Kingfisher flight IT 3149 at an isolation bay of Chattrapati Shivaji airport in Mumbai May 20, 2010. REUTERS

Caught off-guard by the employees’ decision to move court to seek the closure of Kingfisher Airlines, the private Indian air carrier’s Chairman, Vijay Mallya, wrote a letter to them giving the details of the revival plan.

Mallya assured the employees that the management was making every attempt to resume the services of the grounded airline. He said the services would be resumed by summer with a fresh capital infusion of Rs.6.5 billion from his UB Group.

“The limited restart plan, which we target for the beginning of the 2013 summer schedule, requires funding of approximately Rs.650 crore which is committed to be provided by the UB Group and associates,” Mallya said in a Jan. 10 letter to Kingfisher employees, Livemint reported.

The employees Wednesday threatened to file a petition in court to wind up the company under the Company's Act if the management did not share its revival plan with them and give a timeframe for paying the salary dues. The airline has not paid to its employees since May last year.

In his letter, Mallya detailed the revival plan submitted to the aviation controller. He said the first part of the revival plan included a proposal to restart the operations with seven aircraft and funding details and payment of outstanding salaries to the employees.

“The second part is a full scale rehabilitation of our airline growing to 57 aircraft within 12 months of recapitalization. Both plans contain detailed information on key assumptions and funding requirements including payment of outstanding salaries to employees,” he said.

However, he did not elaborate on the timeframe for the repayment of the salary dues.

Mallya said the airline was yet to get a foreign investor and blamed the government’s delay in relaxing the FDI limit and the excessive taxation and high costs for its inability to find a suitor. He said talks were on with multiple investors for a stake sale.

“The Aviation Industry in India is a seriously complex one including high costs resulting from excessive taxation and monopolies. Investors need to be convinced about the long term prospects of their proposed investment in Kingfisher and this takes time. Please rest assured that we are in discussion with multiple investors and remain confident that we will secure a deal,” he wrote in the letter.

Mallya gave a quick advice to the employees on the dangers of going to the media and urged them to be careful in their interactions with media.

“Media - as you know, the media has continued their negative reporting on Kingfisher. I would urge each one of you to be particularly careful in any interaction you may have with them. Unfortunately, considerable management time is spent correcting or clarifying media reports than in transactional discussions,” the letter said.