After a brief Diwali respite, when liquor baron and Kingfisher Airlines (KFA) chairman Vijay Mallya announced a stake sale in United Spirits to Diageo to possibly revive the ailing carrier, there is tension in the air once again.
KFA employees continue to languish without salary payments and revival plan in sight.
KFA employees say they have been betrayed, yet again. KFA had promised three months' salary (March-May) before Diwali but only a handful received their salaries for May. KFA, grounded since October, is yet to submit a revival plan to the regulator.
"We feel cheated and have no one to turn to for help. The airline management had promised a timetable for payment of unpaid salaries, which they have failed to adhere to. We are living off our savings. Neither the government nor the regulator is of any help. We have been left at Mallya's mercy," said a Delhi-based Kingfisher pilot.
A 17-bank consortium that has an exposure of around Rs.8,000 crore in KFA, would wait to hear from Mallya when they meet later this month, before deciding their next move.
Certain aircraft lessors and bankers have invoked corporate guarantees given by UB Holdings on behalf of KFA.
"The biggest issue by far is employee wages. Without that issue being resolved, employees are less inclined to work to guidelines and therefore, continue to pose risks to operational safety," said Saj Ahmad, a London-based aviation analyst. "The fact that no revival plan has surfaced points to problems," he said.
Analysts don't expect any foreign airline to invest in Kingfisher - which had a debt of more than $1.4 billion as on March 31, 2011, in its current state - with its massive debt burden, crippled fleet and poor employee morale.
Aaviation consultancy firm Centre for Asia Pacific Aviation had said in an October research report that in order to become a prospective investment target, Kingfisher will first require significant recapitalisation of at least $600 million (Rs.3,250 crore) and a restructuring of its debt, and a new management team.
"We are addressing all important issues on priority," KFA said in a reply to an email query from HT but gave no details.
KFA's accumulated losses as on March 2012, were more than 50% of its net worth.