Mallya assures deal in works to revive KFA

Offers a month's salary to employees who haven't been paid for 14 months

UB Group chairman Vijay Mallya has once again said he’s hopeful on the revival of the grounded Kingfisher Airlines (KFA), as talks are on with an investor keen on the debt-ridden carrier. The outcome is likely to be known in 90 days, he said, adding United Breweries Holdings Ltd (UBHL), the holding company of UB Group,  is considering a continued investment in the airline and would pay a month’s salary to KFA employees.

At the company’s annual general meeting (AGM) on Tuesday in Bangalore, Mallya said the two recent deals in the Indian aviation industry — Tata Group’s tie-ups with Air Asia and Singapore Airlines — would boost investor sentiment in the sector.

“Obviously, this is an encouraging news for potential investors in the airline industry in our country when an entity of the magnitude of the Tata Group is showing interest in not one ... but two airlines. In fact, there is an investor who is serious and is engaged in dialogue with us. The outcome, one way or the other, will be known in about 90 days,” Mallya said while addressing shareholders.

<b>Interim funding on</b>
He added the KFA board had asked the board of UBHL to continue some interim funding “to keep the lights on” at the airlines. UBHL, which has invested heavily in KFA and still has dues of about Rs 3,500 crore, is also considering a payout of one month’s salary to the employees, subject to the approval of the Karnataka High Court.

Employees and shareholders speaking outside the AGM said they did not have much hope from the new deal to revive KFA being talked about. But the high court has granted the company four weeks of time to provide the update on a likely deal, after reviewing a confidential document submitted by KFA, said to be suggesting advanced level of talks.

However, during the AGM, shareholders have expressed considerable apprehension over the working of KFA. With the entry of Tata Group into the space, and two new players — AirAsia and Singapore Airlines — sending shudders through the currently operating airline industry, shareholders questioned KFA’s chances to survive with the business model that led to its downfall.