Govt not impressed with Kingfisher plan for flying again

NEW DELHI, JAN 11: 

Kingfisher Airline’s plans to take to the skies could tumble with senior Government officials indicating that they were not satisfied with the airline’s plans to invest Rs 650 crore to restart operations, as it might not guarantee efficient and reliable services.

“The revival plan, which was submitted by the airline, had lots of issues regarding lenders and staff payments which we felt may not lead to reliable services,” a senior Government official said.

The revival plan submitted to the Directorate General of Civil Aviation (DGCA) also has no provisions for paying airport operators, the officer said.

Also payment of staff salaries and wages in a phased manner could lead to a situation where the airline may not be able to provide reliable services because if its staff were not paid, they may stop working again and this could inconvenience passengers.

Incidentally, in December 2012, shortly before its operating licence lapsed, the airline’s Chief Executive Officer Sanjay Agarwal had met the DGCA and submitted a letter indicating that the UB Group would pump in Rs 652 crore over 12 months to help the airline restart its operations.

At that time too DGCA officials had indicated that the airline’s communication was not enough for its licence to be renewed.

Earlier this week, after the employees sought sale of assets to clear their back wages, the airline promoter and Member of Parliament Vijay Mallya wrote to them explaining his plans of submitting a revival plan to the DGCA.

In the letter, Mallya mentioned that the UB Group was willing to provide Rs 650 crore to the airline.

He also mentioned that the airline planned to restart operations in two phases.

In the first phase, which should be implemented from the summer schedule 2013, it plans to start operations with seven aircraft and increase this to 21 aircraft in four months.

In the second phase, it plans to grow to 57 aircraft within 12 months of recapitalisation, the letter states.

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