NEW
DELHI: The Directorate General of Civil Aviation (DGCA) has asked cash-strapped Kingfisher
AirlinesBSE -3.49 % to clear employees' dues at one go
before being allowed to resume operations. The airline's flying licence expired
on Monday.
Kingfisher Airlines submitted a third revival plan on December 24 to save its licence, but the aviation regulator found it unconvincing and demanded reassurances from the company besides setting many preconditions on December 29.
"DGCA asked Kingfisher Vice-President Hitesh Patelto clear all employees' dues up front. It also demanded a letter of financial commitment from the UB Group and Kingfisher that it would invest 652 crore," a senior government official, who did not wish to be named, told ET.
The lapse of its licence would deal a huge blow to the company and its employees, who are yet to receive salaries for many months in 2012.
Airport operators like the Airports Authority of India(AAI) and GMRBSE 2.33 %, to whom Kingfisher Airlines owes hundreds of crores, will also have to give their consent before the stricken airline can resume operations.
Two Years to Renew Licence
Kingfisher Airlines CEO Sanjay Agarwal met DGCA chief Arun Mishra on December 24 and submitted a 'limited restart plan' that aims to begin operations with five Airbus A-320s and two ATRs, going up to 10 A-320s and 11-ATRs after 10 weeks of flying.
The airline said employees will get two months' salary every month till all dues are cleared. The payment will start once the airline resumes operations. The plan added that the promoters (UB Group) would infuse Rs 652 crore into the airline to fund operations for the next 12 months.
Although the Vijay Mallya-owned airline's flying permit expires by default, it still has two years to renew it, according to a provision made by the government in 2007.
Kingfisher has not operated a single flight since October after furious engineers, who had not got salaries for months, refused to certify aircraft. Since January this year, Kingfisher has presented DGCA with at least three revival plans, but failed to stick to them. The last one, presented in mid-October, was termed "not satisfactory" by the government.
Kingfisher Airlines has debt of close to Rs 8,000 crore and suffered losses of Rs 1,609 crore in 2008-09, Rs 1,647 crore in 2009-10, Rs 1,027 crore in 2010-11 and Rs 732 crore in 2011-12. The airline's shares ended at Rs 14.90 on BSE, down 2.3% from its previous close.
http://economictimes.indiatimes.com/news/news-by-industry/transportation/airlines-/-aviation/DGCA-asks-Kingfisher-Airlines-to-clear-employees-dues-before-take-off/articleshow/17836356.cmsKingfisher Airlines submitted a third revival plan on December 24 to save its licence, but the aviation regulator found it unconvincing and demanded reassurances from the company besides setting many preconditions on December 29.
"DGCA asked Kingfisher Vice-President Hitesh Patelto clear all employees' dues up front. It also demanded a letter of financial commitment from the UB Group and Kingfisher that it would invest 652 crore," a senior government official, who did not wish to be named, told ET.
The lapse of its licence would deal a huge blow to the company and its employees, who are yet to receive salaries for many months in 2012.
Airport operators like the Airports Authority of India(AAI) and GMRBSE 2.33 %, to whom Kingfisher Airlines owes hundreds of crores, will also have to give their consent before the stricken airline can resume operations.
Two Years to Renew Licence
Kingfisher Airlines CEO Sanjay Agarwal met DGCA chief Arun Mishra on December 24 and submitted a 'limited restart plan' that aims to begin operations with five Airbus A-320s and two ATRs, going up to 10 A-320s and 11-ATRs after 10 weeks of flying.
The airline said employees will get two months' salary every month till all dues are cleared. The payment will start once the airline resumes operations. The plan added that the promoters (UB Group) would infuse Rs 652 crore into the airline to fund operations for the next 12 months.
Although the Vijay Mallya-owned airline's flying permit expires by default, it still has two years to renew it, according to a provision made by the government in 2007.
Kingfisher has not operated a single flight since October after furious engineers, who had not got salaries for months, refused to certify aircraft. Since January this year, Kingfisher has presented DGCA with at least three revival plans, but failed to stick to them. The last one, presented in mid-October, was termed "not satisfactory" by the government.
Kingfisher Airlines has debt of close to Rs 8,000 crore and suffered losses of Rs 1,609 crore in 2008-09, Rs 1,647 crore in 2009-10, Rs 1,027 crore in 2010-11 and Rs 732 crore in 2011-12. The airline's shares ended at Rs 14.90 on BSE, down 2.3% from its previous close.
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