Bloomberg News

Kingfisher Resumes Flights After Cancellations That Irked Mallya

July 15, 2012

Kingfisher Airlines Ltd. (KAIR), the Indian carrier struggling with losses, said it will resume normal service after earlier scrapping about 40 flights when some employees refused to work because they haven’t been paid.

All flights will be operating as scheduled, the company said in a statement in Mumbai late yesterday. The disruption led billionaire Chairman Vijay Mallya to warn that workers who stay away may hamper efforts to revive the airline.

“Damaging the future of Kingfisher in the public eyes is not going to produce cash,” Mallya said in a letter to employees posted on the company’s website on July 14. “This only makes my recapitalization efforts more difficult by causing concern and apprehension among our potential investors.”

Kingfisher’s market share in April dropped to the lowest among India’s six airline operators from second in October as it ended a discount service and grounded planes following more than 10 quarters of losses. The airline is operating 20 planes after reducing services to about 120 a day, compared with 66 aircraft and about 340 daily flights in March 2011.

More than 75 percent of employees received their salaries on the “committed” date of July 13, Kingfisher said yesterday, adding it assured staff the rest will get paid on July 16.

Kingfisher may post a loss of as much as 14 billion rupees ($254 million) this fiscal year and needs about $1 billion of funds, CAPA Centre for Aviation, an industry consultant, said in May. The airline has pledged its brand, office furniture and other assets against 64.2 billion rupees of debt, Junior Finance Minister Namo Narain Meena said in parliament in New Delhi on Dec. 9.

To contact the reporter on this story: Pratik Parija in New Delhi at pparija@bloomberg.net

To contact the editor responsible for this story: Paul Tighe at ptighe@bloomberg.net;


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