Kingfisher Airlines, on Thursday, got temporary relief with its bankers agreeing to release Rs.60 crore locked in an escrow account to pay employees’ salaries. After several hours of meeting here at SBI office, the consortium of 17 banks gave this lifeline to the airline, bankers said.
In yet another development, the airline’s company secretary Bharath Raghavan has left the company. It is expected that salaries of employees would be paid shortly and the airline may resume operations shortly. According to officials, the lock out has been extended till October 12, as talks between the management and employees failed on Thursday, the last day of the partial lock out.
Till going to press Kingfisher had spelt out anything on this. Earlier in the day, the airline’s attempts to get its employees back to work without paying them anything failed with employees sticking to their demand. While most engineers and pilots want their seven-month dues to be cleared immediately, some are willing to resume duty after getting four months salary. But the management could not commit anything due to cash crunch. The Kingfisher saga claimed its first victim, on Thursday, when the wife an employee killed herself in her Delhi home, allegedly due to acute financial problems concerning her family and the job insecurity of her husband, a store officer in the airline’s engineering department said.Meanwhile, aviation think tank Centre for Asia Pacific Aviation (CAPA) has suggested that the airline should voluntarily shutdown to reorganise and restructure. “This will surely provide the airline with a greater chance of an orderly recovery, even if that remains an outside chance,” the CAPA said in a note.
“The CAPA estimates that a fully-funded successful turnaround of Kingfisher will require over $billion, which may be conservative. This would involve an immediate capital infusion of $600 million. The banks appear to be willing to help, in some ways they have no option, but they want to see the UB Group take the first step,” the CAPA said.