DGCA to ask for more details from Kingfisher on its finances
As Directorate General of Civil Aviation (DGCA) examined the beleaguered carrier's revival plan submitted two days ago, the Minister said its "financial picture is still not clear. UB Group has not said anything on the funding of KFA. Its plan is not backed by any clear funding proposal."
Official sources said DGCA would soon seek additional details regarding the funding plan and hold talks with Kingfisher's creditors and airport operators before deciding on its application seeking permission to relaunch its services.
With the liquor baron Vijay Mallya-owned airline owing money to its staff, banks, airports and tax authorities, the sources said all these stakeholders needed to be convinced that the carrier's interim revival plan was viable.
Kingfisher CEO Sanjay Aggarwal had, at a meeting with DGCA chief Arun Mishra on Monday, indicated that the airline would require about Rs 652 crore over the next 12 months for running its operations. Of this amount, Rs 120 crore would be needed to meet salary arrears for its employees.
This entire fund would come from the UB Group's resources as banks were unwilling to fund the cash-strapped airline, Aggarwal is understood to have said then.
Recently, Mallya told the 17-lenders consortium that he was preparing to restart limited operations with a planned fund infusion of Rs 425 crore through internal resources.
Kingfisher, which has a debt of nearly Rs 8,000 crore and accumulated losses and liabilities of a similar amount, has been grounded since October one after its pilots and engineers went on strike.
As per the plan submitted to DGCA, Kingfisher would resume operations with five Airbus and two ATR turboprop aircraft and scale it up to an 11 ATR and 10 Airbus fleet within 10 weeks.
The entire operation of the airline had remained grounded for three months since October after a strike by its engineers and pilots, then a lockout declared by the management and, thereafter, DGCA suspending its flying permit which expires on December 31.
Kingfisher officials have claimed that there were no dues against oil companies, barring interest payments due to HPCL.
Its dues to airport operators, including the Airports Authority of India (AAI) to which it has an outstanding of over Rs 250 crore, still remain pending.
"There is no date yet for the airline restarting operations. It will take DGCA a few days to examine the airline's interim plan. After DGCA gives the airline the go ahead, it will take another 6 to 8 weeks for the airline to begin operations," the sources said.