India’s debt-ridden private air carrier Kingfisher Airlines cancelled several flights Monday, fearing a number of its striking employees might not report for work. The company’s shares plummeted 5 percent on the Bombay Stock Exchange following the reports.
Kingfisher Airlines, controlled by liquor baron Vijay Mallya, said in a statement that it was forced to cancel several flights as a section of its striking employees were forcefully preventing the other staff from attending duty.
"A section of employees of Kingfisher Airlines has not been reporting for work over the last fortnight and over the past two days, they have been threatening and even manhandling the other employees who are reporting for work," Kingfisher spokesman Prakash Mirpuri said in a statement.
There were also reports of employee violence as some Kingfisher engineers manhandled an executive in a minor brawl Sunday. According to a Live Mint report, the airline's ground staff refused to attach an air bridge to a plane at the Mumbai airport, stranding passengers onboard, leading to the scuffle.
Meanwhile, reports indicate that Kingfisher management’s attitude led to Sunday’s agitation by the crew. According to media reports, the management has made part payment of dues to a section of pilots and engineers to ensure that at least they could operate minimum services using that section of employees. This irked the remaining crew which has not been paid for months, causing them to resort to agitation.
All Kingfisher flights, scheduled to depart from the New Delhi airport until 4:30 p.m. Monday, were cancelled, the airport's website showed.
However, Firstpost, quoting the DGCA, reported that no kingfisher flights took off Monday.
“We are considering, examining the whole situation,” Arun Mishra, the Director General of Civil Aviation, told Firstpost over the phone. "No Kingfisher flight is operating at the moment," Mishra added.
The air carrier with a debt burden of about Rs 90 billion is operating under a contingency plan, running a few schedules. The carrier, named after Mallya’s flagship beer brand Kingfisher, has not paid salaries and credit dues to its staff since February.
Its employees, including the pilots and engineers, have had on and off strikes demanding the dispersal of the salaries and other dues.
Kingfisher Airlines has a total debt burden of over $1.4 billion and has not posted any profit since its inception in 2005. The company owes about $600 million to creditors, lenders, suppliers and employees in salary dues and operating expenses.
SBI-led lenders consortium, with a total exposure of about Rs. 70 billion in the cash-strapped airlines, held inconclusive talks about the carrier's turnaround plan last week and appointed SBI Capitals to create a framework for reviving the loss-making airlines within the next 3-4 weeks.
The lenders also rejected a fresh loan request from Kingfisher to meet operating expenses saying that requests for the fresh loans would be considered only after the promoters bring in fresh equity to the carrier. The bankers will meet next month to decide on the future course of action for the indebted airline.
Although Mallya, known for his flamboyant lifestyle, has maintained that he is in talks with private equity investors to infuse capital since a year, no foreign investors have openly expressed interest in the debt-laden air carrier so far. Recently, the government of India eased FDI rules allowing 49 percent investment in the aviation sector by foreign companies.
Kingfisher shares were down 5 percent at 15.35 rupees as of 12:30 p.m. local time Monday on the National Stock Exchange.