Kingfisher extends lockout by another 3 days

Ailing Kingfisher Airlines on Thursday extended its partial lockout by another three days till Sunday as talks between its management and employees failed to end the deadlock over non-payment of salaries for last seven months.

The situation was further marred with the wife of one of its Delhi-based employees allegedly committing suicide, blaming financial stress due to non-payment of salary to her husband for five months.

The airline also announced in the National Stock Exchange that its company secretary, Bharath Raghavan, has quit the company.

In an internal note, the airline conveyed the management's decision to its staff of extending the lockout till October 7.

The striking pilots are now planning to move the labour court against the airline for failing to pay their backlog.

Kingfisher Airline CEO Sanjay Agarwal and executive vice president Hitesh Patel met Delhi-based staff, including engineers and pilots, to convince them to rejoin duty.

Sources said the management offered the March salary to the employees and promised to pay the remaining six months salary once the airline is recapitalised. This offer was rejected by the employees for the second time in two days.

Kingfisher stocks tumbled by about five per cent, falling for the fourth straight day. The script tanked 4.79 per cent to hit the lower circuit limit of Rs.13.90 on the BSE.

The airline notified the National Stock Exchange saying Bharath Raghavan "has resigned as the Company Secretary of the Company with effect from the close of business on September 30, 2012. Consequently, he has ceased to be the designated Compliance Officer of the Company with effect from that date."

Civil Aviation Minister Ajit Singh also expressed doubts whether the carrier, facing a partial lockout, will resume its operations soon.

He further maintained that the airline should be in a position to get its planes certified and satisfy the DGCA that the schedule which they have given is maintained.

Concerned over the worsening crisis, Kingfisher's lenders held an emergency meeting in Mumbai to discuss the evolving situation.

After their meeting with the airline top brass, the striking employees said the talks "ended in a failure as there was no commitment made by management regarding payment of overdue salaries."

"The employees demanded payment of long pending salary (seven month) prior to resuming operations. All employees expressed their keenness to resume work provided their dues are cleared expeditiously," they said in a statement.

The talks came on the last day of the partial lockout declared by the management, which had earlier promised aviation regulator DGCA that it would resolve issues with the staff and try to resume operations by tomorrow, which now seems unlikely.

Kingfisher has been saddled with a huge loss of Rs 8,000 crore (Rs 80 billion)  and a debt burden of another over Rs 7,000 crore (Rs 70 billion), a large part of 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.

The Directorate General of Civil Aviation (DGCA) has submitted an interim report on the serious crisis facing Kingfisher to the Civil Aviation Ministry.

The report referred to the seven-day strike by engineers and pilots over non-payment of salaries, the partial lockout and suspension of its entire operations, and said that operational safety has been seriously jeopardised.

The regulator is also believed to have said that non-payment of salaries was a matter of serious concern, not only for the employees, but also affected safety as those seriously affected were manning flight operations.

According to the laid-down norms, an aircraft cannot take off before it is certified as fit for flight by engineers.

Kingfisher, which had a fleet of 64 aircraft several months ago before the crisis engulfed it, is now operating only ten of them -- seven Airbus A-320s and three turbo-prop ATRs. The number of daily flights have also come down substantially from over 400 last year to between 70 and 80.