Kingfisher chairman Vijay Mallya today wrote to airline employees outlining the company's revival plan a day after they threatened to move court seeking closure of the airline.
Mallya's letter was clearly aimed at pacifying employees who have not been paid since June but some remained unconvinced as the airline's management in the past has not stuck to its assurances.
Mallya wrote, the airline was on "safe ground'' and making all efforts to secure renewal of the airline operating permit which lapsed last month. “We have submitted a detailed restart plan to the DGCA which is in two parts. The first part deals with a limited re-start utilising 7 aircraft ramping up to 21 aircraft in 4 months. The second part is a full scale rehabilitation of our airline growing to 57 aircraft within 12 months of recapitalisation,” Mr. Mallya informed his employees in the letter. "The banks have been very co-operative and patient. There has been no discussion at all on recall of loans, enforcement of securities, etc.as reported in the media. On the contrary, the banks have expressed their keen desire to see Kingfisher fly ,'' he wrote in the letter.
On Thursday, Kingfisher shares ended up 9.7% at Rs 14.70. The stock hit a record low of Rs 7.05 in August.
"Mallya's letter brings nothing new to the table. In the past too the airline has given assurances about restarting the airline and paying salaries but that has not happened. We were supposed to receive June salary before Christmas. Two days back employees met executive vice president Hitesh Patil and he said the airline may pay salary before month end,'' a Kingfisher employee said.
Kingfisher management had promised the employees that their dues till June will be paid by December 2012. However, it failed to meet the deadline. The commitment to the employees had come following a two-month strike by its engineers and pilots over non-payment of dues.
Earlier Kingfisher had said that while the March 2012 salary would be paid within 24 hours, the April salary would be paid by October 31, May dues before Diwali in mid-November and June salary by December end. The salary dues from July to September would be paid by March next year after recapitalisation of the airline.
Kingfisher, whose flying license (Scheduled Operator’s Permit) expired on December 31, 2012, had submitted a revival plan to the regulator DGCA on December 2012. The DGCA, however, did not accept it and asked to furnish additional details.
Kingfisher is burdened with a loss of Rs. 8,000 crore and a debt burden of another over Rs. 7,524 crore, a large part of that has not been serviced since January.