Aviation minister Ajit Singh on Wednesday said Kingfisher Airlines had failed to provide a clear funding plan to the Directorate General of Civil Aviation (DGCA) in its proposal to revive operations.
DGCA sources have also said the plan is silent on paying dues to airport operators, oil companies, other vendors and on resolving the debt of around Rs 8,000 crore.
The airline’s chief executive officer, Sanjay Aggarwal, had on Monday given DGCA a plan for limited resumption of the carrier’s operations, with funding of Rs 652 crore from the UB Group (of which the airline is a part) over 12 months, as banks were unwilling to extend further credit.
Questioning the premise of the supposed funding, the minister said, “UB did not say they are going to give anything. We do not even know if the plan is acceptable to its employees.”
However, Singh added the DGCA would consult all stakeholders, such as creditors and airport operators, before deciding on the proposal. Prakash Mirpuri,a KFA spokesman, could not be reached for comments.
A senior DGCA official said more details on payment of dues to vendors would be required.
In the plan, operations are to be restarted on a cash-and-carry basis with airport operators and oil companies. The Rs 652-crore funding would be for payment of Rs 120-crore salary dues, refurbishment of planes and daily operating losses. The operations would begin with five Airbus and two ATR turboprop aircraft, six to eight weeks after KFA’s licence suspension was revoked. The fleet could be scaled up to 11 ATRs and 10 Airbus planes within 10 weeks, DGCA sources said.
The CEO is understood to have informed DGCA that the salary dues would be cleared by giving two months’ wages and back wages each month, from next month.
While the airline owes Rs 250 crore to the Airports Authority of India, KFA claimed there were no dues to oil companies, except interest payments to Hindustan Petroleum. It is understood to be negotiating with airport operators to settle their dues.
The carrier, controlled by liquor tycoon Vijay Mallya, has been seeking a cash infusion for more than two years. It is supposed to be in talks with possible investors, including Etihad Airways.
KFA has also applied to have its operating licence renewed; this is to expire on Monday . This licence was suspended in October, after the airline halted services because of a strike by engineers and pilots, demanding seven months of unpaid salaries.
The shares of KFA fell 0.3 per cent to Rs 15.90 at the close of trading here. The stock has dropped 24 per cent this year.
