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Kingfisher Airlines says ready to pay salaries in next few days

Kingfisher Airlines CEO Sanjay Agarwal met DGCA chief Arun Mishra and blamed a small section of employees for the recent mess, saying it had led to suspension of all operations till October 4.

BT Online Bureau   New Delhi     Last Updated: October 2, 2012  | 15:59 IST

Kingfisher Airlines' top officials met the Directorate General of Civil Aviation (DGCA) on Tuesday , a day after declaring a partial lockout, and promised to pay salaries of the staff held up for last six months.

The airline's CEO Sanjay Agarwal, who along with Executive Vice President Hitesh Patel met DGCA chief Arun Mishra, blamed a small section of employees for the mess, saying it had led to suspension of all operations till October 4.

The airline has stopped sale of tickets till then.

Agarwal briefed DGCA about the financial problems facing the crisis-ridden carrier as well as the next steps being taken to restore normalcy.

"We have shared the steps which we are going to take in the next few days with the DGCA. We have explained our position to DGCA," Agarwal said after the meeting.

Kingfisher has been saddled with a huge loss of Rs 8,000 crore and a debt burden of another over Rs 7,000 crore which it has not serviced since January.

Several of its aircraft have been either taken away by its lessors or grounded by the Airports Authority of India for non-payment of dues during the past few months.

Regarding pending salaries, Agarwal said: "We will clear the pending salaries in the next few days. I myself haven't got the salary."

Over 80 pilots and 270 engineers have been on intermittent strikes over the past few months, saying they had not been paid salaries since March this year.

The latest agitation launched by the engineers, supported by pilots, began on Friday.

Civil Aviation Minister Ajit Singh on Tuesday made it clear again that Vijay Mallya's cash-strapped airline would not be allowed to fly if safety was compromised.

"We will have to look at what their plans are....we will take a decision after reviewing the situation," he said.

Singh had on Monday suggested that since Kingfisher engineers were on strike, the airline could get its aircraft certified for flying by other certified engineers.

Following this, the airline, which has a fleet of Airbus aircraft, was understood to have initiated discussions with Air India and IndiGo to utilise their certified engineers to check their fleet. However, no firm agreements have yet been arrived at, airline sources said.

The Kingfisher officials informed DGCA that they would resume operations from Friday, sources said, adding that the aviation regulator wanted to be "fully satisfied" with their operational parameters.

It asked the airline to "explain their operational preparedness" again when they resume flights as safety was of prime concern.

Kingfisher is understood to have initiated talks with "a couple of airlines" on putting in investments, sources in the know said, adding that the entire process would take two-three months to fructify.

Kingfisher is also understood to have informed DGCA that it has been in talks with the Central Board of Excise and Customs (CBEC) and Central Board of Direct Taxes (CBDT) to de-freeze its bank accounts to enable them pay the salaries.

About Rs 60 crore were stuck in these accounts, which would go a long way to clear salary and other dues, sources said.

The airline officials have also informed the aviation regulator that some Indian banks have offered to help it out, but only after the company finds fresh investors and gets investments.

The airline has been operating seven Airbus A-320s and three turbo-prop ATRs to fly about 80 flights daily.

In a statement late Monday night, the Vijay Mallya-owned private carrier said it has been forced to declare a "partial lock-out" following a series of "protracted and unabated incidents of violence, criminal intimidation, assault, wrongful restraint and other illegal acts" by some employees.

The airline said: "The action by the recalcitrant employees who have regrettably chosen to take law into their own hands forcing a complete paralysis of operations were all unnecessary and unprovoked."

"It has been decided that flight operations will be suspended for the next 3 days, i.e. until October 4," it added.

The airline also claimed that "a vast majority of the staff are willing to cooperate and support the company in these turbulent times."

The agitators had on Monday met top airline officials but did not get any assurance about salary payments.

A representative of the striking engineers who was part of the meeting had said, "we had a long meeting with the CEO (Sanjay Aggarwal) but no solution has come out. Rather he threatened a temporary shutdown saying the company did not have funds to pay salaries even for a month."

With inputs from PTI

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