Sources with consortiums managing the two airports say 'strong decisions' are likely in the next ten days as the ailing airline continues to default on payment
Dark clouds seem to have permanently enveloped the skies for Kingfisher and there appears to be no silver lining. According to sources at India's two biggest airports -- Mumbai and Delhi -- the airline has recurrently failed on its promises and with pending dues increasing day by day, tough decisions are likely in the next ten days. In fact, if the situation doesn't change, the carrier might be barred from operating by the two airports, sources say.
No road MAP? Sources say airport authorities are in a hurry to recoveru00a0dues because of the growingu00a0
uncertainty over the fate of the carrier.u00a0File Pic
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Mumbai International Airport Limited, a consortium of GVK Infrastructures, has pending dues of more thanu00a0Rs 70 crore with Kingfisher. "We put them on cash-and-carry after they failed to clear past dues in a stipulated time period. Now they are defaulting even on the present arrangement. As per the agreement, we can restrict their operations, but to avoid any passenger inconvenience we still haven't done so. We have written to the airline many times and have asked them to stick to the agreement. If they continue to default on payment, we will have to take strong decisions as we also have a limited capacity," said a source close to GVK Infrastructures.
In the eye of a storm
The sources also added that aviation authorities including Directorate General of Civil Aviation (DGCA), Airports Authority of India (AAI) and Civil Aviation Ministry are aware of the situation and the pother is because of growing uncertainty over the fate of the carrier. When contacted, Isaac George, CFO, GVK group said, "I would not like to comment on the issue. This is purely a matter between us and our client and we don't want to take it to the public."
The ailing airline also owes more than Rs 90 crore to Delhi International Airport Limited (DIAL), a consortium of GMR group. Sources at GMR too confirmed that several reminders have been send to the company for recovery of pending dues. Saptarshi Sanyal, Public Relations Officer of DIAL refused to comment on the matter.
Kingfisher is also obligated to pay more than Rs 220 crore to AAI, a reason why it decided to shut down services at as many as half a dozen airports, after access was denied by the authority. The airline was recently barred from using the Lucknow airport because of non-payment of dues. The carrier has also suspended operations for Kolkata, Hyderabad, Patna, Lucknow, Thiruvananthapuram and Bhubaneswar.
3,500 KF workers could lose jobs
Jobs of more than 3,500 Kingfisher employees are at risk, sources inside the airline claimed. They said that the carrier, which currently has 7,000 workers on its payroll, is planning to shut down more than 30 operational centres in coming weeks and wants to layoff a minimum of 3,500 employees.
Kingfisher statement
"Kingfisher Airlines has begun the 2012 summer schedule operating approximately 120 daily flights with 20 aircraft. There are several stations to which operations have been temporarily suspended. Since we could resume operations after getting re-capitalised, most staff at these stations has been asked to stay at home whilst remaining on the company's rolls.
There is however much speculation on whether we are going to layoff a large number of our staff. To clarify, we are in a 'holding' pattern right now and are waiting for various decisions from the Govt and our consortium of bankers on FDI policy, working capital funding. All of these will have a major impact on staffing decisions we will have to make. We would dearly like to retain our staffs that have remained dedicated and loyal under trying circumstances. Our immediate priority is to access our funds to pay outstanding staff salaries."
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