India's Kingfisher unlikely to fly again: minister
October 24, 2012, 12:27 am TWN
MUMBAI -- India's aviation minister on Monday virtually sounded the death knell for the cash-strapped Kingfisher airline, saying it would be “very difficult” for the ailing carrier to resume operations.
The statement comes after the aviation regulator on Saturday suspended the flying license of the debt-laden airline, which has grounded its fleet since Oct. 1 due to a crippling strike by employees over unpaid salaries.
Kingfisher, promoted by liquor baron Vijay Mallya on its best selling beer brand, owes billions of dollars in taxes, airport fees and to staff who have not been paid for the past seven months and are on strike.
“It would be very difficult,” Ajit Singh, India's civil aviation minister told New Delhi Television on Monday, when asked if Kingfisher could start flying again.
In a desperate bid to bring the staff back to work, the carrier on Monday proposed to pay employees three months of pending pay by the Hindu festival of Diwali on Nov. 13.
Kingfisher shares slid 4.8 percent to 10.9 rupees at the Bombay Stock Exchange on Monday. Shares have fallen 29 percent since the staff agitation started.
Relations between management and staff reached boiling point last month after the company declined to commit to a date for settling its debts, prompting employees to walk out.
Mallya is desperately seeking a foreign buyer to save it from complete collapse, but many analysts are doubtful any rescue is possible.
Kingfisher was India's second-largest airline until a year ago but now it has a market share of just 3.5 percent, the smallest of the country's carriers.