Neelam Mathews

Striking pilots and engineers of India’s Kingfisher Airlines have accepted a three-month portion of their eight months of unpaid salaries and agreed to return to work, even as management struggles to get its suspended Scheduled Operator’s Permit reinstated. Still, civil aviation minister Ajit Singh warned that paying salaries alone would not guarantee that Kingfisher would fly again. “I think the Kingfisher problem is much bigger; even if they pay the salaries today, are they going to take off and fly? I don't think so,” he said. “They have to give a very viable, financially sound plan, that they can maintain the schedule, pay the taxes, pay the oil companies, pay the airport authorities…and how about the banks?” He cited “safety reasons” for the suspension, adding, “the next logical step” could result in the cancellation of Kingfisher’s license.


A report by Sydney-based consultancy Center for Asia Pacific Aviation places Kingfisher’s debts at $2.49 billion, including bank debts of $1.1 billion. It has also accumulated losses of $1.9 billion.


With no cash left to pay its debtors–including lessors, airports and vendors–Kingfisher maintains possession of less than 10 of the 66 airplanes that comprised its fleet last year. Airports Authority of India is considering not allowing Kingfisher’s airplanes to land or take off until it clears its outstanding debt, said an official.


“Kingfisher wants to bring its fleet strength down to the five minimum required to retain its license and slots,” an airline official told AIN. “That would mean a staff strength of just 500 if they run on the Delhi-Mumbai route,” including 60 captains and copilots, 60 mechanics and a skeleton ground staff. The carrier currently employs a staff of 4,000.


The airline has talked for months of attracting an investor. “It is very unlikely as it would have happened by now because [Kingfisher chairman] Vijay Mallya had done a lot of groundwork even before the government announced the Foreign Direct Investment policy [for foreign airlines to invest in Indian carriers],” said Jitender Bhargava, former executive director of Air India.