Wednesday, July 29, 2009

Kingfisher Airlines staff to get delayed salaries


In a call to arms, the man running operations at financially stressed Kingfisher Airlines Ltd, India’s biggest airline by passengers, has asked its 6,000-plus employees to adjust to delayed salaries and embarrassing dealings with unpaid vendors in the months ahead that will decide if the airline survives a severe downturn, even as chairman Vijay Mallya tries to secure funding for the carrier. The communication comes at a time that airlines across the globe are faced with difficult times, and follows a similar missive from the office of Air India chairman and managing director Arvind Jadhav asking employees to join hands in a 'fight for survival'. In an email sent late Saturday night, Hitesh Patel, executive vice-president, Kingfisher Airlines, wrote it was difficult to foresee what the future held for the carrier. But, 'in a sense, our performance, our outlook over the next two months would dictate the shape of that battle,' he wrote, explaining how the airline was trying to improve its state of affairs.

An airline executive confirmed the receipt of the email, reviewed by Mint. Patel, who wrote the email after interactions with employees at four main bases for the airline, did not take calls for comment. The era of 'guests', as Kingfisher Airlines calls its passengers, Patel said, was getting over with the growing market share of low-cost carriers (LCCs). 'For the forseeable future, the market will be ruled by the LCCs,' Patel said, adding Kingfisher is following the trend and operating three of four of its flights as Kingfisher Red, its low-fare service. The number of planes in Kingfisher Airlines’ fleet has been reduced to 69 from 89, added Patel, a former executive at JetBlue, a low-fare US airline.

Kingfisher Airlines reports losses


India's Kingfisher has posted a net loss of 16.09 billion rupees ($334.9 million) for the year ending 31 March on net sales of 52.7 billion rupees. Kingfisher did not provide a comparison to the figures from a year. The last fiscal year was only nine months long as that took into account the airline's integration with low-cost carrier Deccan, and the separation of the latter's charter business into a separate company. It also wanted to bring its accounting year in line with that of other firms in the UB Group, its parent company. For those nine months in the previous fiscal year that ended on 31 March 2008, the airline posted a net loss of 1.88 billion rupees.

The losses come amid a turbulent time for the Indian airline industry, with the carriers reeling from falling demand and high costs. Kingfisher said earlier in July that it was seeking board approval to issue shares worth 50 billion Indian rupees, and secured shareholder approval to borrow up to 125 billion Indian rupees.The cash could allow the company to shore up its balance sheet and navigate its way out of the rough times, says a spokeswoman.