KFA staff patch up with mgmt, but will DGCA revoke suspension?

The remarkable turnaround by employees of Kingfisher Airlines leaves a lot of unanswered questions. Last evening, employees agreed to join back work after the airline’s CEO Sanjay Agarwal promised payment of four months of salary arrears by December end.

The airline management is expected to meet the Directorate-General of Civil Aviation (DGCA) today after its employees finally agreed to return back to work. However, resumption of flight operations may take another three to four weeks as the airline would have to get the suspension of its flying license revoked by the DGCA which also has to satisfy itself on safety issues as well as the viability of their financial and operational plans.

Engineers, who had been instrumental in the airline stopping all flights and eventually in its flying permit being suspended, also agreed to the management’s offer. One engineer confirmed to Firstpost that him and some of his colleagues have already received SMSes from their banks about one month’s salary credit and that they were “fully satisfied” with what the management had offered.

More from Business

Hyundai India’s Rs 27,870 crore IPO oversubscribed by 2.28X, largely driven by institutional investors How Indian fintech startups are driving Malaysia’s UPI-like digital payments revolution

[caption id=“attachment_502823” align=“alignleft” width=“380”]  AFP[/caption]

But not one employee we spoke to could explain how an airline, which just days back was pleading with them to accept just one months’ salary and return to work, has managed to generate enough funds to pay four times that amount in the next two months.

Have banks, which are already saddled with Rs 7000 crore loans from Kingfisher, advanced more money? Or did the airline always have this cash but was playing a cat-and-mouse game with the employees to bargain for a much smaller payout?

Impact Shorts

More Shorts

Tata Harrier EV vs Mahindra XEV 9e: Design and road presence compared

As Trump weaponises tariff, Fed sees a bigger worry: Not jobs, but rising prices in America

Agarwal had himself said earlier that the airline’s loss per day is Rs 8 crore but if it remained grounded and there were no flights, the loss was halved to Rs 4 crore.

So if one examines the situation closely, Kingfisher has much to lose in monetary terms if it flies again! Meanwhile, an engineer confirmed the management’s plan of beginning operations again with 12 aircraft.

He said that Kingfisher plans to submit a full recovery plan to the aviation regulator DGCA by tomorrow. The DGCA needs to be satisfied on several counts: the airline’s engineers are certifying each plane before it takes to the skies; all its employees have been paid and there is no dispute pending between the management and them; and the airline can now stick to its published and approved schedule.

Apart from these criteria, Kingfisher also has to deal with creditors such as the Airports Authority of India-to whom it owes close to Rs 300 crore-and oil companies. Does it really have enough cash to pay employees, creditors and then manage daily cash flows? Agarwal had said earlier that the monthly salary bill of the airline is about Rs 20 crore so the airline needs Rs 80 crore to just clear four months of salary dues by December.

An employee said that Thursday’s olive branch by the management was more to pander to Chairman Vijay Mallya’s ego rather than to resolve the crisis at the airline. He said Mallya perhaps wanted nos hassle, no protests by employees during the F1 Grand Prix which begins tomorrow at Greater Noida.

Which is why he perhaps instructed the management to release four months’ pay in return for peace. If Mallya’s ego ensures a happy Diwali for Kingfisher employees, it may not be such a bad thing after all.