You are here: Home » Companies » News
Business Standard

Furnish salary plan or stay grounded: DGCA to Kingfisher

The company has a monthly wage bill of Rs 20 cr

Bs Reporter  |  New Delhi 

The Directorate General of Civil Aviation (DGCA) on Tuesday gave an ultimatum to the beleaguered Kingfisher Airlines (KFA) that it must give a timeline for paying employees, apart from a “satisfactory and realistic” operational preparedness plan, before it can get permission to fly again. The airline, which declared a partial lockout yesterday, has said it will start flying again from October 5.

The ultimatum came after the airline’s CEO Sanjay Aggarwal and Executive Vice President Hitesh Patel had an hour’s meeting with DGCA chief Arun Mishra in Delhi. They told the regulator paying regular salaries to the 4,000 employees would depend on the government unfreezing the airline’s bank accounts. The accounts were frozen by the tax authorities.

Speaking to reporters after the meeting, Mishra said: “The main issue here is the staff. We would like to see what their financial plan is and how they are going to pay the staff. Otherwise, we would not be able to allow the airline to fly.”

KFA executives told the DGCA that about Rs 60 crore was stuck with the government, which had frozen 40 of its bank accounts for non-payment of dues and talks were on with the Central Board of Excise and Customs and the Central Board of Direct Taxes for relief.

Aggarwal was confident the airline would be able to pay the pending salaries in the next few days. The company has a monthly wage bill of Rs 20 crore.

Though Kingfisher has a low market share of 3.2 per cent, on certain routes it has notable concentration. Airfares on such routes have started rising. According to travel portal Makemytrip, Jet’s fares have risen on the Delhi-Mumbai, Delhi-Bangalore and Mumbai-Bangalore routes. The average rise in Jet Konnect fares is around Rs 1,400 and for Jet airways, it is around Rs 400.

First Published: Wed, October 03 2012. 00:41 IST