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Fresh trouble for Kingfisher

Publication Date : 10-01-2013

 

The Kingfisher Airlines Maintenance Engineers Association, which had agreed last year to support the Kingfisher Airlines management in getting the beleaguered airline back on its feet, is again on the warpath after the interim revival plan submitted by the airline was found to be inadequate by the Directorate General of Civil Aviation (DGCA) as it did not have a clear funding proposal. 

The union wants a high-level enquiry against the Indian airlines management which it believes is steeped in “corruption”. They have also decided to move court to seek a legal remedy. 

The association had a two-hour meeting yesterday where it was decided that a memorandum will be given to the ministries of civil aviation, labour and corporate affairs. The memorandum which will be submitted in a few days is to seek a high-level enquiry into the financial mismanagement “amounting to corruption” by the airlines.

"We had given a chance to the airlines management. But it has failed to live up to our expectations,” said a member of the union, Santosh Gautam. 

The maintenance engineers are likely to be joined by the pilots soon, but it is not clear whether both the pilots union and the union of maintenance engineers will move court. 

According to sources, the KFA management has not got back to the DGCA over the issue of a clear funding plan which has put off the unions in Kingfisher Airlines. The Scheduled Operators Permit of the airlines had expired on December 31 and the airline is struggling to start limited operations. 

The Maintenance Engineers Association has in the memorandum stated that the company should be closed down if the management cannot run it properly. According to the union, the management has been able to pay salaries up to May last year only and the promises of clearing the pending salaries by December 2012 remains unfulfilled.

“The company is not serious about reviving the airline,” said Gautam. 
He added that while the DGCA is doing its best to get the grounded airline into business, the regulator cannot run it. 

The maintenance engineers association has lamented that there is no sign of UB group infusing capital in Kingfisher Airlines as laid down in the revival plan. The management was supposed to clear the arrears of the employees which amounts to 120 crore rupees with funds from UB group. But this is yet to materialise, according to the union. (One crore is equivalent to 10 million.)

“We demand that the management should share the revival plan with us. We also want it to spell out a payment schedule for our salary dues. If we don’t find their explanation satisfactory, we will file a winding up petition in the court under section 433 of the Companies Act,” said the memorandum.

The union has also reportedly decided to write to the Kingfisher management asking them to sell assets of the airline and clear salary dues running into several months. There was no immediate response from the airlines management to the employees’ decision. 

Although the slots of Kingfisher with the Delhi International Airport Limited (DIAL) are on hold, the airline has lost its slots with Mumbai International Airport Limited (MIAL). A DIAL official said that these slots can be given away to another airline if they remain unutilised. The MIAL has given away six of 11 flying slots, with sources saying most of them have gone to Indigo. 

Kingfisher’s bankers, who have been discussing recovery measures during the past few months, have also decided to take legal action against the airline company for its failure to repay over 7,000 crore rupees debt despite repeated reminders. Kingfisher is burdened with a loss of 8,000 crore rupees and a debt burden of another over 7,524 crore rupees, a large part of which has not been serviced since January.

Meanwhile in stock market today, Kingfisher Airlines share slipped by more than four per cent on the back of a series of negative developments.

 

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