New Delhi: The management of Kingfisher Airlines Ltd is trying to pacify employees, who have not been paid for nearly two months, as anger mounts and experienced pilots start leaving the cash-strapped carrier ahead of the difficult winter season.
Chief executive officer (CEO) Sanjay Aggarwal wrote two emails last week to allay staff concerns about the prospects of the airline, which has curtailed more than four dozen flights, is returning some leased aircraft, and conserving cash to stay afloat in the face of high debt, a depreciating rupee and steep fuel prices.
Employee engagement: Kingfisher Airlines CEO Sanjay Aggarwal sent two emails in as many days to the carrier’s staff. By Mint
Aggarwal also plans to meet employees in separate groups.
The airline led by liquor tycoon Vijay Mallya has around 7,000 employees, most of whom have not been paid for October even as November nears its end. Salaries are typically paid by the seventh of every month.
“Everyone is disgruntled; it’s like a private Air India,” said a Kingfisher Airlines executive on condition of anonymity, referring to state-run Air India Ltd, which has not paid allowances to employees for four months now.
“Someone suggested either there is simply no money at all, or it’s a conspiracy to downsize. Many who have loans, etc., would leave on their own,” he said.
Kingfisher Airlines’ monthly salary bill is about Rs 60 crore, compared with Air India’s Rs 250 crore, according to the respective carriers. Kingfisher has amassed a debt of Rs 12,668 crore, Mint reported this month.
In a Saturday email to employees, Aggarwal said he has been receiving anonymous emails raising these concerns.
“I have received emails from many of you seeking answers to several common issues affecting your personal and professional life. Your anxiety is understandable and yes it is my responsibility to answer these questions and to share our progress. I once again assure you that there is no risk to the long term future of the airline,” Aggarwal said in the email, reviewed by Mint.
He did not say when salaries will be released, but added, “We have a lot of ‘irons in the fire’ to deal with various issues affecting the industry and those that are unique to Kingfisher.”
Aggarwal wants to hold meetings with employees in batches this week, the email added.
This was the CEO’s second email in as many days to the staff. On Friday, he told employees the airline’s problems will be resolved in weeks.
Kingfisher is looking at Rs 800 crore to help it tide over the crisis, but it remains unclear whether this will be through debt or infusion by a strategic investor.
Aggarwal’s emails came even as some pilots have quit the airline over the last few months. The critical winter season, when foggy weather makes flying difficult, starts in December.
The airline had clearance to operate 418 daily flights during the season, of which 103 have not been started. Seventy-two flights were being cancelled, said an official familiar with the development, asking not to be identified.
The Kingfisher executive cited above said that if experienced pilots left in droves during foggy weather, “it’s going to be chaos.”
He said he did not have any expectations from the CEO’s proposed meetings with employees. “These meets and greets have happened in the past, too. Some have been very volatile, but nothing has happened.”
An airline spokesperson declined to comment.
“Kingfisher troubles are not only financial, but also employee exodus, specially pilots,” said aviation analyst Shakti Lumba, a former head of operations at Alliance Air and IndiGo. “The other airlines are now cannibalizing Kingfisher... There is obviously a high level of demoralization among Kingfisher employees due to an intense media and industry onslaught. Even if the company refinances itself, by that time, the crucial manpower has left so it becomes difficult to use the fleet to an optimum level.”
Indian airlines on Saturday sought Prime Minister Manmohan Singh’s intervention to help tide over the current financial crisis.
All three listed airlines—Kingfisher, Jet Airways (India) Ltd and SpiceJet Ltd—reported a combined Rs 1,500 crore loss in the July-September quarter.
The airline’s stock fell 7.3% to Rs 24.85 on the Bombay Stock Exchange, while the benchmark Sensex dropped nearly 1% to 16,008.34 points.