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After Air India, Kingfisher delays salary payment

Mihir Mishra  |  New Delhi 

After government-owned Air India, Kingfisher Airlines has delayed salaries of its employees. The UB Group-controlled airline has not paid salary for July.

“We have not been paid for July. The management said it does not have the money, and has not given any date for the payment,” said a Kingfisher Airlines executive requesting anonymity.

An airline spokesperson did not respond to phone calls but in a text message said: "Due to the bank strike last week, the salaries could not be processed. This has since been done."

The salaries hadn't come till the report was being filed.

For the last one year, employees have been crediting their salaries on the 7th of every month. Earlier, the company used to pay on the 31st. The airline has a staff strength of 6,000 and spends Rs 58 crore on salaries a month. According to the first quarter financial results, it has Rs 173.66 crore under the employees cost head, which has increased from Rs 163.40 crore during the same quarter last year.

The executive said the airline had not paid the lease rental for three of its aircraft and the leasing company had asked the airline to return these.

“The airline has paid to the leasing company and that is why we have not been paid,” said the executive. The type of the aircraft, however, could not be confirmed.

Kingfisher operates with a fleet of 66 aircraft — three Airbus 319, 23 Airbus 320, eight Airbus 321, five Airbus 330 and the rest are ATRs. It also has over 100 aircraft on order, including five Airbus 380.

Kingfisher is the only listed carrier to have not turned profitable. It ended the financial year 2010-11 with a loss of Rs 1,027 crore. It also increased its losses in the first quarter to Rs 263 crore from Rs 187 crore during the same period last year.

The airline has also delayed on payments to oil marketing and airport operators, among others. Hindustan Petroleum Corporation Ltd, recently stopped fuel supply to the airline for a few hours after the dues touched Rs 650 crore, of which Rs 170 crore was not covered by guarantees.

The airline was recently threatened by GMR, which operates the Delhi and Hyderabad airports, that it will be put on a cash-and-carry system after the airline’s dues touched Rs 90 crore (Rs 68 crore for Delhi and Rs 22 crore for Hyderabad).

First Published: Sun, August 14 2011. 00:55 IST