No talk of shut down: Kingfisher
 |
But pilots protesting delay in payment of salaries claimed
that Kingfisher CEO Sanjay Aggarwal had warned them during a meeting on
Thursday that the extreme step could be resorted to, indicating the
airlines’ closure, if they don’t resume duties.
“Sanjay
Aggarwal met with a group of pilots to appeal to them not to stay away
from flying duties which would potentially affect the operating
schedule. At no time was there any suggestion that Kingfisher Airlines
would shut down,” a statement by Prakash Mirpuri, vice president,
corporate communications of the airlines, said.
“We are trying
our very best to cooperate with the tax authorities and get our accounts
un-frozen at the earliest so that normalcy could be restored, employee
salaries paid and further aircraft recoveries started,” he said.
A different
version of the meeting was given by the pilots. “If you want to fly, you
fly and if you don’t want to fly, you are free to do so. Otherwise, we
will have to think of the extreme option (of completely closing),” the
pilots quoted Aggarwal as having told them.
Aggarwal also
told the delegation he cannot commit anything before 10th
March, a pilot, who was part of the delegation, said.
The development
comes on the heels of the service tax department freezing as many as 40
bank accounts of Kingfisher Airlines for non-payment of dues to the
tune of Rs 40 crore.
Civil Aviation
Minister Ajit Singh has indicated that flight license could be
temporarily suspended, instead of being cancelled, to give the airline a
chance to resume operations once it sorts out its problems.
The aviation
regulator DGCA has already warned Kingfisher that its financial problems
should not impinge on safety.
A senior pilot,
who was part of the delegation said, Aggarwal was “non-commital” on
heeding to their demand of clearing the dues, which have been pending
since December.
Interestingly,
Aggarwal’s remarks to senior pilots came close on the heels of the
airline’s flamboyant promoter Vijay Mallya promising to clear the dues
soon, saying he had organised the funds.
It is the
fourth such time in as many months that the service tax department has
frozen its bank accounts. Late last month, the income tax department had
also frozen the bank accounts for not depositing the TDS.
Chairman of the
Central Board of Excise and Customs, under which the service tax
department falls, S K Goel had on 22nd February said the
airline had to clear Rs 70 crore in dues before 31st March.
The airline has
been in a financial mess and is unable to meet its obligations,
including paying salaries to its employees, clearing tax arrears and
payment to vendors, for months now.
Following
continuous non-payment of salaries, late last week a section of its
engineers went on a ‘tools-down’ protest for a day.
As the crisis
deepened when salaries were not paid, several employees including some
pilots quit the airlines.
Over 60 pilots
have left in the past few months. The airline reduced its flights
beginning mid-October.
From 400
flights a day it had sought permission for during the October-March
period, it is down to only 170 daily flights now, using just 28 aircraft
of 64.
The airline,
which never made a profit since its inception in May 2005, reported a
net loss of Rs 444.26 crore in the December quarter, due to high fuel
costs and weaker rupee, up from Rs 253.69 crore a year ago.
It suffered a
loss of Rs 1,027 crore in 2010-11 and has a debt of Rs 7,057.08 crore on
its books apart from over Rs 4,000 crore of accumulated losses and a
restructured long-term loan of around Rs 7,000 crore.
The cash
starved airline has not been able to get fresh funding from banks, as a
19-member bank consortium has made it clear that the promoters must
bring in at least 50 percent of its fund requirement in fresh equity as a
pre-condition for any new funds.
The airline
urgently needs at least Rs 2,000 crore working capital to remain afloat.
No comments:
Post a Comment