Kingfisher Airlines Says It Will Pay Salary Dues In A Few Days; FDI Talks In Advanced Stage

on October 02 2012 7:49 AM

India’s embattled Kingfisher Airlines said Tuesday that it would pay the salary due to employees in the next few days and briefed the Directorate General of Civil Aviation (DGCA) about the latest developments.

The beleaguered airline’s top officials, including chief executive Sanjay Agarwal and executive vice president Hitesh Patel, met DGCA chief Arun Mishra Monday and discussed the ongoing crisis in the airlines and outlined various measures being taken to restore normalcy, PTI reported.

"We have shared the steps which we are going to take in the next few days with the DGCA. We have explained our position to DGCA," Agarwal told reporters after the meeting.

Regarding the pending salaries of the employees since February, he said:  "We will clear the pending salaries in the next few days. I myself haven't got the salary." 

The cash-strapped airline declared Tuesday a partial lockout for three days, blaming a section of the striking employees of resorting to criminal intimidation and obstructing the airline’s operations.

According to a CNBC-TV 18  report, the DGCA  has made it clear to the airline officials that it will be allowed to fly only if it comes up with a satisfactory plan to pay employee salary dues in the stipulated timeframe.

The debt-ridden airline was running under a contingency plan with scaled down schedules and minimum aircraft and has not paid employee salaries since February. 

The airline management has briefed the DGCA of its revival plans and has informed that it is hopeful of resuming operations Oct. 5.

The company, which owes about Rs. 80 billion to lenders, suppliers and utility providers, has claimed to be in talks with foreign investors for the past year.  

After meeting with Kingfisher management, the DGCA said that the airline was in the advanced stages of talks regarding an infusion of  foreign direct investment. However, it reiterated that the cash-strapped airline could continue its operations only if management creates a conducive environment for the employees to work.

“Salary is the main issue to satisfy employees. They have to do it. I can’t dictate to them but they have to create a situation where they can run the airline properly,” Mishra said, according to a Live Mint report.

The DGCA also said that the private air carrier would have to raise funds for daily operations. At present, the UB Group is constantly funding daily operations.

Meanwhile, in a reprieve to Kingfisher Airlines, the frozen bank accounts of the air carrier with about Rs. 600 million in them would be de-frozen based on court orders, CNBC-TV 18 reported.

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