New Delhi: Crisis-ridden Kingfisher chief Vijay Mallya on Thursday issued a veiled threat to shut down the airline because of employees — who have not been paid since March and some since February — going on strike every now and then. The tone of the letter has not gone down well with the unpaid employees and they are planning some steps to somehow get the government's attention to their plight, something which may put a further question mark on the airline's ability to maintain its schedule.
"Why should I spend everyday to keep our airline afloat if the actions of our own colleagues lead to loss of guest confidence and lower income by cancellation of flights or low load factors that result from uncertainty? What is the confidence that I can give to investors who I am in dialogue with?" the letter says, adding, "If some colleagues feel that I will be pressurized by flight cancellations, they are wrong. Instead, I will stop my own support as a few are effectively holding the entire company to ransom."
Pilots return to work after Mallya promises salary by Aug 13
Mumbai: The striking Kingfisher Airlines pilots returned to duty on Thursday after chairman Vijay Mallya promised to pay their pending salaries by August 13, a report said. A section of the pilots called strike on Wednesday as a result of which, the airline had to cancel 31 flights. Shares of the airline went down by nearly 1 per cent as a result of the strike, the fourth one since February.
According to a Business Standard report published on Thursday, bankers and aircraft lessors to the airline have invoked corporate guarantees worth Rs 835 crore, outing much stress on United Breweries (UB) Holdings, Kingfisher's primary promoter-vehicle.
Kingfisher's financial stress puts UB under pressure
Bankers and aircraft lessors to Kingfisher Airlines have invoked about Rs 835 crore (Rs 8.35 billion) of corporate guarantees by the airline's primary promoter-vehicle UB Holdings, owned by liquor baron Vijay Mallya.
While announcing its results on Wednesday for the quarter ended June, UB Holdings said about a tenth of the corporate guarantees for Kingfisher Airlines were being invoked.
The company's exposure to the airline, as on June 30, "include investment in equity of Rs 2,114.28 crore (Rs 21.14 billion), corporate guarantees to banks/aircraft lessors of Rs 8,919.86 crore (Rs 89.19 billion), loans and advances of Rs 1,814.14 crore (Rs 18.14 billion) and other receivables of Rs 165.62 crore (Rs 1.65 billion).
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