Kingfisher Airlines will fly again by summer, says Mallya

NEW DELHI: It took a threat from employees to seek legal help in selling grounded Kingfisher's assets and get their salary dues for promoter Vijay Mallya to finally break his silence . Early on Thursday morning, barely hours after the angry employees met in Delhi, Mallya told them in a mail that he is trying to restart operations this summer with a fund infusion of Rs 650 crore from the parent UB Group. However, the letter made it clear that the airline's seemingly endless wait for an investor is still on and also remained silent on when the dues of employees and other agencies will be cleared. The disclosed details of the "two-part restart" plan submitted to the Directorate General of Civil Aviation (DGCA) late last year. "The first part deals with a limited re-start utilising seven aircraft , ramping up to 21 aircraft in four months. The second part is a full-scale rehabilitation of our airline growing to 57 aircraft within 12 months of recapitalization," he says for Kingfisher that has an unenviable debt-cum-loss figure of almost Rs 16,000 crore. 

However, the aviation ministry — whose soft handling of the Kingfisher crisis till the airline itself decided to stop flying on October 1, 2012, has drawn severe flak — now says that Mallya needs to find a steady flow of funds for the airline as a repeat of the previous erratic adherence to schedule and flying in fits and starts can't be allowed again. And this, DGCA and ministry sources who have seen and trashed the restart plan, say will not happen without recapitalizing the airline either through internal group funding or an investor .Importantly, DGCA chief Arun Mishra made it clear to the airline management that it must clear all salary dues before hoping to fly again. 

The regulator, like Kingfisher employees , now seems to have no faith in the hollow timelines given by the management repeatedly in the past for clearing salary dues. 

But Mallya's letter did not speak of any progress in getting an investor. "We have been in discussion with prospective strategic as well as financial investors for over a year... The aviation industry in India is a seriously complex one, including high costs resulting from excessivetaxation and monopolies . Investors need to be convinced about the long-term prospects of their proposed investment in Kingfisher and this takes time. Please rest assured that we are in discussion with multiple investors and remain confident that we will secure a deal," he says. 

Mallya sounded more confident about banks that have an exposure of about Rs 7,500 crore in the grounded airline. "They (banks) have requested our urgent attention to certain overdues which we are addressing with them... There has been no discussion at all on recall of loans, enforcement of securities... On the contrary, banks have expressed their keen desire to see Kingfisher fly again." 

But Kingfisher's unpaid employees and numerous other agencies like airport operators that cite huge dues from the airline are feeling anything but safe and are now running out of patience.

http://timesofindia.indiatimes.com/business/india-business/Kingfisher-Airlines-will-fly-again-by-summer-says-Mallya/articleshow/17976966.cms