Kingfisher Employees to Return to Work, According to CEO

Tuesday, 30th October 2012 at 01:02am

The CEO was able to persuade the employees to resume work after sitting down with them on Thursday, marking the end of their strike. The employees have not received their salaries yet since March this year.

The embattled airline has stopped flying since October 1 after a violent protest by its employees. Founded by a liquor magnate Vijay Mallya, it needs to persuade the aviation regulator to have its licensed reinstated after it was temporarily suspended on October 20.

Its CEO, Sanjay Aggarwal, told the media that all employees who were on strike, agreed to return to work following Thursday's meeting. He was optimistic that the current development will result to better days ahead and is hoping that the airline's operation will normalize in a few weeks.

Following Thursday's announcement, its shares improved and gained 4.83%, within the 5% limit for the day. The amount was similar to the four previous market sessions.

In an attempt to convince the employees to return to work, the company offered to pay them their three months worth of wages starting November 13 and every month thereafter. As a result, the employees went back to work on Friday.

The cash-trapped Kingfisher was the nation's second biggest carrier in terms of domestic market share before it plunged to the worst financial crisis in its history early this year. The embattled airline has never been profitable since it started commercial operations in 2005. In fact, according to the consultancy firm, Centre for Asia Pacific Aviation, it has piled up a debt of almost $2.5B since day one.

On October 20, the country's Directorate General of Civil Aviation (DGCA) suspended its license to fly for safety issues.

While the unpaid salaries are a major concern to many, most especially to its employees, the fiscal assurance to the DGCA seems to outweigh everything else. This was according to Ajit Singh, Civil Aviation Minister of India who was quoted as saying through ET NOW TV on Thursday.

They need to settle their payment obligations to oil companies, leasing companies and the airport authority. It is clear that their bigger problem lies not on the unpaid salary. They should see to it that the DGCA is satisfied with everything they are required to do in order to take their wings again.

The beleaguered airline has been desperately looking for investors to help their effort to revive the company. It was one of those who strongly lobbied for a change in the antiquated aviation law that the Indian government finally approved more recently. The new policy now allows foreign capitalists to own up to 49% stake in an Indian airline. At the moment, no foreign companies seem to show interest to partake in the Kingfisher's misery.

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