No money to pay salaries, says Mallya

Employees of the grounded airline have been on a hunger-strike since yesterday at Kingfisher House in Mumbai

Kingfisher Airlines chairman Vijay Mallya on Friday told his agitating employees, who called off their strike this evening, he did not have money to clear their salary dues.

“I don’t have the money to pay your salary dues because I cannot use the proceeds from the United Spirits-Diageo deal for this due to an injunction from the Karnataka High Court,” Mallya reportedly told the striking employees.

The agitation, on since Thursday at the Kingfisher House in Mumbai,  was called off after the second round of meetings  between the employees and airline Chief Executive Officer Sanjay Agarwal, sources said. Agarwal refused to talk to reporters. The strike was called off as the management agreed to continue to have a dialogue with them, sources said.      

Salaries have not been paid since last August. Last November, Mallya clinched a deal with British liquor major Diageo to sell 53.4 per cent stake in United Spirits for Rs 11,166 crore.

The deal also involves Mallya selling 19.3 per cent of his personal/promoter holding in United Spirits to Diageo for Rs 5,742 crore.

Kingfisher employees were expecting Mallya to bring in funds from the proceeds of the Diageo deal. Driven by mounting losses, the airline, which never made any profit since inception in May 2005, has remained grounded since last October and the regulator DGCA cancelled its flying licence in December. "As many as 60-70 employees are currently on an indefinite hunger strike at the Kingfisher House near the domestic airport," sources had told PTI late last evening.

Though the flamboyant chairman Vijay Mallya has been promising relaunch since February this year, nothing has happened so far. Meanwhile, the 17 lenders to the airline, which owes them nearly Rs 7,500 in principle, excluding arrears since January 2012, have sold sureties and shares of the airline as well as group companies worth around Rs 1,000 crore so far as part of their recovery process.