CEO to meet staffers today

Last Updated: Mon, Oct 22, 2012 05:06 hrs

Kingfisher Airlines Chief Executive Officer Sanjay Aggarwal will meet staffers tomorrow to try and persuade them to end the ongoing strike, in the wake of the airline having its flying licence suspended.

Upon receiving the suspension order from the Directorate General of Civil Aviation (DGCA) yesterday, Aggarwal wrote to employees, seeking their backing. “This is not a cancellation but a temporary suspension, valid only till such time that we submit a concrete and reliable revival plan to the satisfaction of DGCA,” he wrote. “We sincerely hope that the meeting next week with engineering and pilot representatives is conclusive, following which we can present our resumption plan to DGCA. It is our endeavour to restart operations.”

The airline, hit by losses and huge debt dues, has been grounded since the beginning of October and its permit was suspended for failing to present a credible revival plan.

“There has been a lack of communication and mistrust between the management and employees. The employees are likely to press for some sort of an agreement which will legally bind the management on pending salary payments. Even we realise that the management can't pay seven months backlog at once and popular sentiment is that they give concrete assurance on paying half the dues and pay salary for one or two months before we resume work,” said a Kingfisher engineer.

A few days earlier, DGCA had also decided not to allot any slots to KFA in the winter schedule starting November 1 and going on till April 30. The airline has suspended all its forward bookings in the wake of the DGCA order.

“KFA’s ability to bounce back from this situation appears challenging. It means deep distress for its employees, creditors and lenders. Some employees might get absorbed by low-cost carriers like IndiGo, SpiceJet and GoAir, who have increased flights in the winter season. Lenders are the worst hit, since they may have to take a significant write-down of loans that have gone bad. Creditors like oil companies, airport companies, service providers and employees might also have to forego their dues,” said Amber Dubey, partner and head of aviation at KPMG.

Explaining the difference between cancellation and suspension, Ajay Prasad, the government’s former civil aviation secretary, said: “A cancellation is more definitive in nature and the airline would (then) have to reapply for a permit and start all over again.”

It would have had to sign fresh aircraft lease agreements, even for the planes in its fleet. The whole re-application process would have taken around six months.

Even so, sources in DGCA say the process of licence restoration could take weeks. "In their concrete revival plan, apart from paying employee salaries, Kingfisher will have to demonstrate to the DGCA that it has sufficient manpower and aircraft for its operations. it will have to submit details related to maintenance schedule, spares, engines and aircraft lease," an official said.

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