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Kingfisher looks to shut some stations, reduce workforce

Kingfisher looks to shut some stations, reduce workforce
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First Published: Thu, Nov 17 2011. 11 52 PM IST

Desperate measures? Kingfisher Airlines aircraft at Mumbai airport. By Bloomberg
Desperate measures? Kingfisher Airlines aircraft at Mumbai airport. By Bloomberg
Updated: Thu, Nov 17 2011. 11 52 PM IST
New Delhi: After reducing flights, cash-strapped Kingfisher Airlines Ltd may shut more than a dozen smaller stations across India and ask some employees to search for jobs over time as it seeks to cut costs.
Desperate measures? Kingfisher Airlines aircraft at Mumbai airport. By Bloomberg
The airline is considering to shut down as many as 14 smaller stations, including Aurangabad, Agra, Nanded, Mysore and Pantnagar, according to Kingfisher officials.
“Some of these are seasonal stations which only work in winter, like Agra; some like Pantnagar, where weather does not allow all-year operations, and some are borderline when it comes to financial viability,” said one of the Kingfisher officials.
It remains unclear if shutting the stations would be permanent and would mean giving over the airport counters and other equipment at these Airports Authority of India (AAI) airports, or they would be reopened after some time.
Flights for routes such as Delhi-Agra were not available for even the month of January on the airline’s Website, though Kingfisher has, so far, announced reduction of about 55 daily flights till the middle of December.
A Kingfisher Airlines spokesman indicated that it will stop flying unprofitable routes.
“We have already announced that Kingfisher Airlines will fly on commercially viable routes and this is in full compliance of DGCA’s (Directorate General of Civil Aviation) route dispersal guidelines,” the spokesman said. “And as far as the employees are concerned there will not be any layoffs.”
The airline’s airport managers at many of these stations have also been told that operations will not start soon, a second Kingfisher official said, requesting anonymity.
“The respective managers have been told individually to avoid any panic across the company,” this official said. “A helpline number has also been given for coordination.”
Some other Kingfisher stations that may be affected are Aizawl, Raipur, Kolhapur, Belgaum, Nagpur, Tirupati, Madurai, Agartala and Silchar.
“The stations shut down by Kingfisher appear to be in the category for gaining credit for operating trunk routes,” said Mohan Ranganathan, an air safety expert and member of the government-appointed Civil Aviation Safety Advisory Council. “If those routes are shut down, DGCA should cancel several trunk route operations of Kingfisher to comply with the civil aviation requirements for Scheduled Transport Operation. They cannot get any selective treatment.”
Most of these stations are operated by the airline’s short-haul ATR turboprop aircraft, though the airline has said in the past that the flight cancellations it has done from November-to-December are to reconfigure its Airbus A320 aircraft fleet.
“To counter these pressures and leveraging its strengths, Kingfisher decided to rationalize network, drop unprofitable flights and expedite its fleet reconfiguration,” Kingfisher said in an 11 November statement. “This initiative will improve the long-term profitability of the airline. The reconfiguration initiative will require up to three aircraft to be out of service over the next three months at any one time for this exercise to be completed.”
Yet a closing down of office space could potentially mean the staff at these smaller towns may either be absorbed within the firm in another station or move on.
“It’s a logical extension that some of the people may be asked to leave,” said a third airline official, who also declined to be named.
The first official said no one has been directly asked to leave the firm so far. “We haven’t asked them to leave, but if they want, they can.”
D. Devaraj, regional executive director, Airports Authority of India (South) said Kingfisher flights from the towns of Salem and Madurai have already been cancelled. “We haven’t been told anything more so far,” he said.
Kingfisher has a 66-aircraft fleet with connections to more than 50 cities. Many aircraft are, however, grounded because of lack of spares, Mint reported this month.
The shares of Kingfisher lost 0.2% to end trading at Rs 24.95 on the Bombay Stock Exchange. The benchmark Sensex dropped 1.87%.
tarun.s@livemint.com
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First Published: Thu, Nov 17 2011. 11 52 PM IST