New Delhi:
Facing heat from employees, Kingfisher airlines boss Vijay Mallya promised to clear the outstanding salaries from Wednesday after tax authorities unfroze bank accounts but the staff on Monday demanded part payment of dues setting a deadline for 8 pm today, April 3, 2012. Sources say the employees have threatened to strike work if they are not paid salary for two months by today and for March 2012 by April 20.
Mr Mallya's promise failed to cut ice with several pilots and staff of the cash-strapped carrier failing to report for duty on Monday to protest delays in salaries leading to cancellation of at least 10 flights from Delhi and Mumbai on Tuesday.
In their "appeal" to Mr Mallya, the employees, pilots included, had said yesterday that they were not in mental condition to undertake their duties and that could "jeopardize the safety of our aircraft." They said, "KFA employees have come to a point where operations have become unsafe due to stress caused by our financial constraints."
Mr Mallya had written to Kingfisher staff saying that since the company's accounts had been unfrozen after it paid Rs. 44 crore to the Income Tax Department and Rs. 20 crore as service tax, it could now pay salary to junior staff by April 4 and pilots and engineers by April 10. Kingfisher Airlines employees have reportedly not been paid salary since December 2011. The bank accounts were unfrozen on Sunday and Mr Mallya said, "My only focus now is to start paying your seriously overdue salaries," said Mr Mallya.
Yesterday, at least five Kingfisher Airlines flights out of Mumbai and Delhi were cancelled as a section of staff did not report for duty to demand immediate payment of salary and allowance backlog. A meeting between the protesters and the airline's top management was urgently convened at a hotel in suburban Mumbai to resolve the situation.
Kingfisher's bank accounts were frozen by tax authorities in February which restricted the carrier's ability to make salary and other payments to ensure smooth running of its daily operations, resulting in the grounding of several flights.
Kingfisher owes $1.3 billion to banks, including the State Bank of India and ICICI Bank.
Mr Mallya is under pressure from his airline's lenders to inject equity into Kingfisher, which has slashed its flight schedule and grounded most of its fleet.
ICICI Bank has asked the embattled airline to top up its loan security or adjust the loan amount after the ailing carrier's stock was pounded in recent weeks.
JP Morgan said last week that pricing power has come back to Indian airlines, but rising oil prices and a weakening rupee will continue to hurt profitability of carriers.
"Going forward, we only see limited aircraft additions, driven mainly by low-cost carriers. Against this backdrop, airlines have been able to raise fares by 10-12 per cent in Mar-12," it said.