KFA offers 3 months' pay but deadlock continues

Last Updated: Tue, Oct 23, 2012 05:41 hrs

The Kingfisher Airlines management on Monday proposed to pay three months’ salaries to its employees before Diwali. It also claimed it had secured the support of pilots and engineers.

However, the airline’s engineers in Bangalore and Delhi have rejected the proposal, demanding the payment of four months’ salaries in the next 48 hours.

An airline official said the company’s ground staff and other employees (excluding pilots and engineers), about 75 per cent of the company’s total employees, seemed to be on board with the management. The company’s management agreed to pay salaries for March (which were been paid to only 2,000 of the 4,000 striking employees) within 24 hours, while salaries for April would be paid in a week and salaries for May would be paid before Diwali, company sources said.

Questioning the silence of Chairman Vijay Mallya, Subhash Chandra Mishra, an airline employee, said, “Staff members will not join work until their dues are cleared. The airline is sending incompetent people to discuss the matter with employees and, therefore, the meetings have failed.” “We don’t trust the management. We want to talk to Mallya. Where is he? We want to hear from him directly. The management has been fooling us till now. They are playing with our emotions and sentiments. I want Dr Mallya to meet us face to face, not through representatives or the internet or any other indirect means,” he said. The airline has extended the lockout at the company till October 25, with chief executive Sanjay Aggarwal asking employees to rejoin work on October 26.

Aggarwal expressed confidence on the negotiations with employees. “We are committed to bringing Kingfisher Airlines on track. I think it is a fair offer and should be acceptable to most. It will be fair to give employees a few days to get back to work. Discussions with investors on recapitalisation continue. We will pay all arrears once the airline is recapitalised,” he said.

While lifting the freeze on the airline’s accounts made about Rs 60 crore available to the company, the average monthly salaries for three months stands at about Rs 75 crore. Responding to a query on funds for paying salaries, Aggarwal said, “I am not willing to discuss the source of the funds. We will organise the funds. We will come back and present DGCA (Directorate General of Civil Aviation) with a viable operational preparedness plan. We hope to become the number one airline once again.”

“The management is seeking feedback from individual employees. The opinion among engineers in Mumbai is divided on whether to accept the proposal. The problem is no one believes the management will stick to its words,” said an engineer.

Kapil Kaul, chief executive of the Centre for Asia Pacific Aviation, said, “I think from no salary to the payment of three months’ sallies is a good start. Moreover, employees had no other option. I think Kingfisher Airlines would be able to present a plan to DGCA to revoke the suspension of the licence. But the airline would have to infuse equity of about $1 billion to ensure a sustainable turnaround.”

On Saturday, DGCA had suspended the airline’s operating permit, as Kingfisher had failed to submit a credible recovery plan. The airline’s winter schedule, too, wasn’t approved. Before its operations were suspended, Kingfisher was operating only nine airbus A320 and ATR aircraft. Last year, it had a fleet of 65 aircraft.

Though DGCA hasn’t approved the winter schedule for the airline, Kingfisher still has slots in airports. Civil Aviation Minister Ajit Singh said, “Kingfisher slots in airports are not being given away to any other airline. The slots would stay with the airline till its suspension. We will decide on giving the slots away when the licence is cancelled. The slots are essential for an airline to attract foreign capital.”

“As engineers are essential for certifying aircraft before flights, we cannot allow unsafe operations to operate. DGCA had already given Kingfisher a lot of time. As it could not come up with any viable operational preparedness plan, the licence had to be suspended,” Singh had said on Saturday.

On Monday, the Kingfisher Airlines stock closed at Rs 10.9 on the BSE, a fall of 4.8 per cent.

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