DGCA not satisfied with Kingfisher assurances

Troubled Kingfisher Airlines Ltd has told the Directorate General of Civil Aviation (DGCA) that it was hopeful of lifting its temporary lockout and resuming operations on Friday, and would soon pay its employees their pending salaries, but the aviation regulator didn’t seem impressed.

“I am not satisfied," director general Arun Mishra said in a phone interview after meeting Kingfisher Airlines chief executive officer Sanjay Aggarwal on Tuesday, a national holiday for the birth anniversary of Mahatma Gandhi when all government offices were shut. “That’s why they have to come back to us before they start operations."

At the same time, there is no risk of the Vijay Mallya-controlled airline losing its licence, Mishra indicated, rejecting a comparison of Kingfisher with MDLR, a carrier that had its licence revoked when the number of aircraft in its fleet fell below the mandatory five.

“It’s not the same case," Mishra said. “MDLR aircraft could not fly. Kingfisher aircraft are airworthy. Their problem is manpower. so the two are different."

Kingfisher Airlines on Monday declared a lockout until Thursday after most ground engineers and pilots stopped working, virtually grounding the airline’s fleet, in protest at non-payment of salaries.

On Sunday, Kingfisher passengers were unable to disembark from planes in Delhi and Mumbai after landing because of a clash among staff over one group having allegedly been paid long-delayed salaries.

At Tuesday’s meeting, Mishra told Aggarwal that the current situation cannot be allowed to continue. He said he had asked Aggarwal to create conditions that are conducive for the carrier to restart operations.

Kingfisher has 4,000 employees, who haven’t been paid for seven months; it has 30-odd aircraft in its fleet, which has been pared by more than half.

“Salary is the main issue to satisfy employees," Mishra said. “They have to do it. I can’t dictate to them but they have to create a situation where they can run the airline properly."

Kingfisher is saddled with accumulated losses of ₹ 8,000 crore and a debt burden of more than ₹ 7,000 crore, which it has not serviced since January. Several of its aircraft have been either taken away by lessors or grounded by the Airports Authority of India for non-payment of dues.

Kingfisher has told the regulator that it would pay salaries once its bank accounts are unfrozen. The airline’s accounts were frozen by the tax department because of non-payment of taxes. Employees’ tax which has been deducted from their salaries has also not been paid to the government in many cases.

“We will clear the pending salaries in the next few days," Aggarwal told reporters on Tuesday. “I myself haven’t got salary."

A senior Kingfisher Airlines pilot, who asked not to be named, said there was a general consensus among employees not to return to work until they were paid salaries. “The engineering team in Chennai has already written a letter to the management saying it will not release any aircraft until release of salaries," this person said

Aggarwal told Mishra that Kingfisher was making a loss of ₹ 8 crore a day when it operated flights and running up a loss that’s half as much during the lockout, Mishra said. The carrier said it’s in talks with various foreign airlines, which have been allowed to invest in Indian carriers.

“They said they are also in talks with a couple of foreign airlines. It will take 2-3 months, there are lot of procedures. Meanwhile, they want to keep operations of 11 aircraft. They also want to service the remaining 20 aircraft in the fleet which are grounded," Mishra said. “Our message to them was—now when you start operations you have to come and satisfy us first."

Mishra said he has also asked the regulator’s fare monitoring unit to look at air fares and take a call on warning other airlines against steep increases in air fares as a result of Kingfisher shutting its services. The peak season for air travel for domestic airlines starts in October and runs till early January.

PTI contributed to this story.

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