Govt not satisfied with Kingfisher’s investment plan

New Delhi: Government is not satisfied with Kingfisher Airlines' plans to invest Rs 650 crore to resume its operations as it may not guarantee an efficient and reliable service, a senior DGCA official said today.

"We want an airline to operate in consistent, efficient and reliable manner. The revival plan, which was submitted by the airline, had lots of issues regarding lenders, staff payment which we felt may not lead to reliable services," the official said.

Kingfisher Airlines' plans to invest Rs 650 crore as part of its plan to return to the skies. The airlines had lost its operating licence on December 31, 2012 and had stopped flying since October.

The official, not wishing to be named, said the revival plan filed by Kingfisher Chairman Vijay Mallya last month with the country's aviation regulator Directorate General of Civil Aviation (DGCA) may not be sufficient to carry out a reliable service.

"The plan had no provision for payment of airport operators, who want their dues to be paid before the airlines starts flying again," the official said.

The official said the payment plan of due salary and wages of staff was in a phased manner, which "we felt may not lead to reliable services.

"If the employees were not paid, then the staff may stop working again which may cause inconvenience to passengers.
There should be no inconvenience to passengers," the official said.

Yesterday, Mallya had written a letter to Kingfisher employees, who have not been paid for eight months now, after they threatened to file a winding up petition in the court under the Company's Act if the management did not share its revival plan with them.

In his letter, Mallya said, "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".

The letter, however, did not mention anything about the payment schedule of dues of the employees, but it said that "both plans contain detailed information on key assumptions and funding requirements, including payment of outstanding salaries to employees."

The airline has not paid to its employees since May last year.

The official also said that four of Kingfisher's leased Airbus 320 aircraft had been deregistered by the DGCA on the request of lessor two years back.

Once India's second-largest airline, 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.