Kingfisher likely to extend lockout

Airline stops ticket sales till 20 October
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First Published: Wed, Oct 10 2012. 12 36 PM IST
Kingfisher Airlines CEO Sanjay Aggarwal on 9 October had asked the airline’s striking employees to return to work. Photo: Mint
Kingfisher Airlines CEO Sanjay Aggarwal on 9 October had asked the airline’s striking employees to return to work. Photo: Mint
Updated: Thu, Oct 11 2012. 03 35 PM IST
Mumbai/ New Delhi: Vijay Mallya-controlled Kingfisher Airlines Ltd is likely to extend its lockout for a second time and has suspended ticket sales until 20 October, according to at least three executives of the carrier.
The top management is in talks with striking employees to convince them to return to work, they said on condition of anonymity as they are not authorized to speak to the media.
Kingfisher, which declared a lockout until 12 October, had been selling tickets for flights from 13 October onwards, when the Directorate General of Civil Aviation (DGCA) asked it to stop doing so on Tuesday. The regulator has asked the airline to submit a revival plan before it resumes flights.
Regulator DGCA sent a show-cause notice on 5 October to Kingfisher asking the carrier why its licence should not be cancelled. The airline has to reply to that by 20 October.
“All flights are subject to regulatory approval,” the Kingfisher Airlines website cautioned fliers.
Chief executive officer Sanjay Aggarwal said the airline expects to submit a revival plan soon to the regulator.
“We are making good progress to end the stalemate. As soon as we get a firm commitment from our employees about returning to work, we will be approaching DGCA to submit our plan,” Aggarwal said in an interview, without divulging details. “Then, we will be able to restart our operations immediately.”
In a letter on Tuesday, Aggarwal had called on employees to return to work.
“Without all of you, without exception, coming back to work, we will have no way forward,” Aggarwal said in the letter. “We have been working relentlessly to try and rectify this situation, and that too against all odds.”
The first executive cited above said, “The airline is preparing its reply to DGCA’s show-cause notice and it will be filing the same once the employees are back. We are working out various options to pay salaries to employees,” he said.
The second executive cited above said the airline has also sought more funds from banks to pay salaries.
Consulting firm Centre for Asia Pacific Aviation, or Capa, said early this month that Kingfisher Airlines should voluntarily shut down to reorganize and restructure its business. As it has been operating a diminished schedule over the last few months, accounting for just 3.2% of domestic market share, this would have a minimal impact on capacity and fares.
“This will surely provide the airline with a greater chance of an orderly recovery, even if that remains an outside chance,” Capa said in a note.
CEO Aggarwal had said in the letter that the airline won’t be able to raise money from foreign investors if its planes aren’t flying.
“We are aware it is a big ask, but no potential investor will put his money in an airline that is not operational,” Aggarwal wrote. “We have come this far, and we have to still go further.”
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First Published: Wed, Oct 10 2012. 12 36 PM IST
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