Kingfisher Airlines Talks With Employees Fail, Lockout Extended

Kingfisher Airlines, India’s crisis-struck airline, will extend its lockout period, said chief executive Sanjay Aggarwal, after a meeting with the employees on Wednesday.

The cash-strapped Kingfisher Airlines had initially announced a partial lockout on Oct. 1 till Oct. 12, after its employees stayed off work in protest, demanding the payment of salary dues pending since March this year. The liquor baron Vijay Mallya-controlled airline announced last week that it would continue the lockout till Oct. 20 as it had failed to convince the striking employees to resume work.

In a desperate attempt to break the impasse over the issue, the management held a meeting with its employees.

"Talks have been positive. We are moving in the right direction. We will have to extend the deadline to restart operations," Aggarwal told reporters.

However, the employees told CNBC TV 18 that talks with management had not yielded desired results.

The meeting was attended by the top management of Kingfisher and its parent company UB group. According to a Livemint report, citing two people in the know of the developments, the management had brought in former chairman and managing director of Air India Ltd and current vice-chairman of UB Group, Subhash R. Gupte, to pacify its striking employees.

Aggarwal said that another round of meeting with the employees will be held Monday to resolve the issues.

Kingfisher Airlines has defaulted on payments to its creditors, airport authorities and tax payments besides employees’ salaries from March, 2012.

Adding to its woes, the aviation regulator said on Wednesday that it has not approved the winter schedule of flights.

The Aviation Ministry and the Directorate General of Civil Aviation (DGCA) have toughened their stand against the crippled airlines and have served a show-cause notice asking why its license should not be cancelled over the unreliable and inefficient service, as all its flights remain cancelled.

Kingfisher has time till Oct. 20 to reply to the DGCA notice, while the SBI-led lenders consortium, which has a total debt exposure of 50 billion in the airlines has appointed SBI capital to come up with a debt-restructuring proposal for the struggling airliner.

Launched in 2005, Kingfisher was once India’s second largest airline, but it never made profit.