Corporate Dec 29, 2012
Hopes of a revival for Kingfisher Airlines are fading fast, with fresh troubles emerging by the day and the expiry date of the flying licence just two days away.
After Aviation Minister Ajit Singh raised his objections to the revival plan submitted by the company, now it is the turn of the Airports Authority of India to tighten the screws on the company.
The state-run organisation that manages airports in the country has said it will not allow the airline to resume operations unless it pays up Rs 300 crore dues, according to a report in the Times of India.
The AAI said this to the sector regulator director general of civil aviation which has sought its views on the revival plan submitted by the airline, the report said.
Even after paying the dues, the airline will be allowed to operate only on a cash-and-carry basis, the AAI has said.
Kingfisher Airlines has not flown any plane for more than two months now, as its staff agitation for salary dues grounded the company forcing a lock-out.
Earlier this month, lenders, who have a collective exposure of about Rs 8000 crore, said they would fund the airline only after it submits a viable revival plan and the promoter infuses equity.
The had rejected Chairman Vijay Mallya's proposal to infuse Rs 425 crore to restart the operations partially.
The aviation minister had also said the revival plan submitted by the airline had no convincing recapitalisation plan.
A CNBC-TV18 report today quoted DGCA sources as saying that the Ball is in Kingfisher's court to furnish further details asked for in the revival plan.
The report said the regulator has asked the company to talk to other stakeholders and satisfy them about its revival plan. This seems to be a difficult proposition for the airline as the lenders have already expressed their doubts about the viability of the plan submitted to them.
Adding to the troubles is the fresh missive the employees sent to the management on 24 December seeking salary dues.
With the flying licence expiring on 31 December, the staff have every right to be concerned.
According to a CNBC-TV18 report yesterday, pilots and co-pilots are yet to receive their May salaries. The staff had ended their strike on 25 October after the management promised to pay the dues.
But the staff are yet to hear from the management about this or even the revival plan, the report said.
Now it looks like the management's promises, which ended the staff strike, were a ploy by to ensure Chairman Vijay Mallya faced no disturbance at the Formula One circuit in Noida.
According to yesterday's CNBC TV18 report, the pilots are now feeling cheated over the unkept promises.
The airline's officials are trying their level best to avoid an expiry of the licence, as it is crucial for the company to get foreign investment, according to the ToI report.
But otherwise too it is difficult to find an investor for an airline, which is grounded for more than two months, has accumulated debt and losses of about Rs 15,000 crore and a disgruntled workforce.
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