Kingfisher Airlines CEO Aggarwal quits

UB Group affiliate takes stake in airline

Kingfisher Airlines Chief Executive Officer Sanjay Aggarwal has quit after three and a half years at the Vijay Mallya-led air carrier. His exit comes even as the airline has failed to provide any update on the unnamed investor reportedly interested in the airline. The airline had earlier said a deal was likely by January.

Meanwhile, Sashikar Enterprises, a UB Group affiliate company, has started buying shares of the airline; as of December 30, it had about two per cent in the grounded air carrier. Headquartered in Bangalore, Sashikar is the cloth making arm of the group under the UB Global umbrella.

Sources said Aggarwal had resigned before September last year but stayed on at Chairman Mallya’s request. They said Aggarwal, a much sought-after name in the aviation sector, has decided to move to the US after leaving the airline.

Aggarwal was brought by Mallya in September 2010 from low-cost carrier SpiceJet, now run by media baron Kalanidhi Maran, after he turned the rival airline around in less than two years. Before that, Aggarwal was at US Airways for six years.

During his tenure, Aggarwal was paid as much Rs 4 crore. He was also the face of the airline’s management, acting as a link with the striking staff of the airline who have not been paid for 17 months. As chief, he was a liaison with creditors for payments regarding which they have taken the airline to court. The airline’s financial health has deteriorated since Aggrawal joined. The low-cost carrier, with a debt of Rs 7,400 crore, was shut after the Directorate General of Civil Aviation cancelled its licence to fly in October 2012. Since then it has not recorded any revenue.

Lenders have sold pledged shares of the airline to recover part of their dues. State Bank of India (SBI) dropped its stake to 2.92 per cent (as of December 30) in the company from 3.31 per cent (as of September 30). This came shortly after SBICap Trustee, on behalf of an SBI-led consortium of 13 banks,  invoked a pledge of 14.29 per cent shares in the company. Subsequently, UB Group’s holding company U B Holdings’ stake in the airline has fallen to 7.36 per cent.

ROUGH WEATHER

* The exit comes even as the airline has failed to provide any update on the unnamed investor reportedly interested in the airline

* Sources said Aggarwal had resigned before September last year but stayed on at Chairman Mallya’s request