Kingfisher pays June-July salary to employees

Kingfisher Airlines paid salaries to its 2,000-odd employees for month of June and July after a section of them threatened to hold protest at residence of Indian Premier League team members and disrupt the matches.

The airline has been grounded since October and its operating permit has been suspended. The civil aviation ministry has refused to revoke suspension as the airline has failed to submit a credible revival plan.

Kingfisher Airlines chairman Vijay Mallya owns IPL team Bangalore Royal Challengers and the employees were threatening a protest on not being paid since month of May. A Kingfisher spokesperson confirmed that salaries of June and July was paid to all the employees today.  

In its revival plan Kingfisher management had said it will start operations on a cash and carry agreements with airports and oil companies. The airline said the promoters will infuse Rs 650 crore in the airline over period of six months.

The Rs 650-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would begin with five Airbus and two ATR turboprop aircraft, six to eight weeks after KFA’s licence suspension was revoked.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

However the civil aviation ministry was not impressed with the revival plan and insisted on no objection certificates from vendors like oil companies and airport operators. Revival plans have also been hit as lessors are  demanding return of planes from Kingfisher Directorate General of Civil Aviation has  deregistered 15 Kingfisher planes and the move will enable leasing companies to recover their aircraft from Kingfisher Airlines for defaulting on lease rentals.

Airport regulator, Airports Authority of India (AAI) has seized several of the 10 aircraft owned by KFA.

The AAI has decided not to release the KFA aircraft till such time the airline clears its dues that it owes to AAI. Some leasing companies like the German Aviation Bank (DVB) moved the Delhi High Court, which ordered that the lessors had a right over these aircraft.