New Delhi: In an emotional appeal to the employees of cash-strapped Kingfisher Airlines Ltd , the carrier’s billionaire founder Vijay Mallya said he was “working tirelessly” to raise funds and sought their help to restore trust among customers.
The letter came on a day when some of the airline’s pilots had threatened to call in sick to protest delays in the payment of salaries. Most employees have not been paid salaries for November and December.
Mallya appealed to the employees to avoid any further flight disruptions.
“Six years ago, when Kingfisher Airlines was launched, I had a dream of starting a unique and special airline. You helped my dream come true and together we have created the most exceptional and vibrant airline,” Mallya said in a letter dated 16 January.
“While I continue to organize funds to ensure uninterrupted operations, I have been working tirelessly with the bankers and investors to fully recapitalize the company. I am also working with the government on the policy changes that are vitally important for the industry.”
Aviation minister Ajit Singh said on Tuesday that his ministry would recommend that the cabinet allows foreign carriers to acquire a stake of up to 49% in domestic carriers, a move that could help boost Kingfisher’s fortunes.
Kingfisher has already pledged assets ranging from its brand to office furniture for bank loans of as much as $1.2 billion (Rs6,132 crore today). Goa’s Kingfisher Villa, famous for hosting new year parties, two helicopters, Kingfisher’s headquarters in Mumbai and shares have also been used as collateral for loans as of 30 November, according to the finance ministry.
“The customer confidence in our airline has recently declined due to the relentless onslaught of negative media reports. We have to work hard and work together to prevent any further disruption and to rebuild the trust of our guests. Please support me in meeting this challenge,” wrote Mallya, Kingfisher’s chairman and managing director.
The letter reiterated that Kingfisher was a UB Group company and said that salaries would be released within two days.
“I take delay in salary payments very seriously and am doing my best to keep it from repeating. For those who did not receive their salaries yet, the process has already started today and you will receive your salaries over the next 48 hours,” he said.
“I personally apologize for the inconvenience caused to you as a result. I would like to once again thank you for standing by me and Kingfisher Airlines through these difficult times.”
Only 44 of Kingfisher’s 66 aircraft are currently operating, while others are grounded because of lack of spares, engines and maintenance issues. As a result, Kingfisher has slipped to fifth position in terms of the number of passengers carried on domestic routes.
Kingfisher now has a 14% market share, only ahead of GoAir’s 6.2%, among airlines in India. Naresh Goyal’s Jet group remains the biggest airline in India, with Jet Airways and JetLite together having a 27.1% share in November. Rahul Bhatia’s IndiGo is second with 19.8%, followed by Air India Ltd at 17.4%.
The airline has been banking on the relaxation of foreign direct investment norms that would allow overseas carriers to invest in local ones, helping Kingfisher raise funds through a stake sale.
The airline will need to raise $1 billion to stay relevant, according to the estimates by the Centre for Asia Pacific Aviation (Capa).
That would include $400 million needed immediately to clear outstanding dues to vendors, bring the grounded aircraft back into service, pay employee arrears and reconfigure planes.
On Tuesday, the airline’s stock rose 4.8% to `25.10 on BSE, outperforming the benchmark Sensex’s 1.71% gain.
tarun.s@livemint.comi