Kingfisher May Cease Operations For Good

Wednesday, 10th October 2012 at 02:27am

The beleaguered airline is doomed to stop flying permanently as it failed to fly its planes as planned. The extended grounding of its aircraft could signal the end of its business as its unpaid employees are in protest asking for their unpaid service of seven months.

Kingfisher Airlines, which is owned by industrialist Vijay Mallya, ceased flying on October 1 after its staff staged a protest two days earlier.

The airline was ordered by the airline regulatory body to submit a position paper on why their permit to fly should be upheld and not revoked. According to the Civil Aviation Director General, the carrier failed to satisfy the body on the status of their operations. They were given up to 15 days to reply.

The heavily-indebted airline was supposed to resume its service on October 5 but to the surprise of the media, it released a statement instead saying that they might not be flying until October 12.

The airline spokesman, Prakash Mirpuri, issued a statement expressing their regrets over the current state of the airline, pointing out specifically the illegal strike that its employees have staged making it impossible for the airline to operate.

On October 4, a day before the airline was scheduled to resume flying, 150 of its staff took to the streets in Mumbai in sympathy to the wife of one of their colleagues who was said to have committed suicide due to financial pressures arising from months of unpaid salary of her husband. The protesting employees, which include pilots and engineers said that they wouldn't report to work until they get their salary.

The carrier, who has an estimated total debt of $2.5B, was advised to voluntarily close shop by the Centre for Asia Pacific Aviation in order to restructure and reorganize itself. CAPA officials said that the airline needs a capital infusion of no less than $1B to turn its business around.

The airline's shares have since been falling since the announcement and dropped 37 percent this year already.

The market share of the erstwhile second largest airline in the country is now 3.2 percent, the smallest among India's carriers.

By: Pete Lee.