New Delhi, Oct. 26: Union Civil Aviation Minister, Ajit Singh has welcomed the end of the Kingfisher Airlines crisis.
With airline employees agreeing to resume their jobs, Singh said: “This is good news. The Kingfisher employees were very troubled. They were facing problems such as sending their children to school and they had not got their salaries for seven months. So, it is good news that they have resolved the crisis, though I do not know exactly what agreement has been made. But the main issue here is that it is good news.”
The airline, owned by liquor baron Vijay Mallya, has not flown since the start of October after an employee protest turned violent.
Despite reaching an agreement with the employees on the phased distribution of overdue salaries, the management of Kingfisher has to still convince aviation regulator – the Directorate General of Civil Aviation (DGCA) – to reinstate its suspended license.Shares in Kingfisher were up 4.83 percent, effectively at their five percent daily limit, after falling by a similar amount in each of the four previous sessions.
Earlier this week, Kingfisher offered to pay three months wages by November 13 and clear arrears every month so that striking employees may restart work by Friday.
Singh has said that the airline will have to submit a plan on how it will manage its resources to pay its loans and salary overdues.
“Right now, Kingfisher Airlines has to decide how they will manage the resources required by the airline. Apart from the employees salary, the lease of the planes, payment to the airport authority, payment to the oil companies and they need working capital loan. They have to submit a plan on this to the DGCA (Directorate General of Civil Aviation) to end the suspension of their license,” he said.
The airline, which was once India’s second largest by domestic market share, has never made a profit since its launch in 2005, and has total debt of nearly 2.5 billion dollars, according to an estimate by the Centre for Asia Pacific Aviation, a consultancy.
Kingfisher has been scrambling for investors to inject fresh capital into it, and had lobbied for a recent Indian rule change that allows foreign carriers to buy up to 49 percent of an Indian airline. However, no international carrier has publicly expressed interest in taking a stake in Kingfisher. (ANI)