KFA shares hit historic low, Mallya readies new plan
Vijay Mallya-led Kingfisher Airlines on Tuesday said that the bleeding airline had suspended operations to "several stations" and directed most employees posted at such places "to stay at home". Following the announcement, its shares closed down 1.5% at Rs 16.5 on the BSE, after hitting a new intra-day low of Rs 16.2.india Updated: Mar 27, 2012 22:26 IST
Vijay Mallya-led Kingfisher Airlines (KFA) on Tuesday said that the bleeding airline had suspended operations to "several stations" and directed most employees posted at such places "to stay at home". Following the announcement, its shares closed down 1.5% at Rs 16.5 on the BSE, after hitting a new intra-day low of Rs 16.2.
KFA did not specify which cities it had suspended operations to. There was also no clarity on the fate of employees who haven't been paid for months and have now been asked to sit at home.
The carrier has already suspended global operations. KFA said it will operate only 120 daily flights using 20 aircraft compared to the 418 flights and 64 aircraft that it operated at its peak.
KFA has submitted four recovery plans to the aviation regulator so far, three of which have failed. The airline is heavily indebted to lessors, suppliers, lenders, employees, oil firms and airports.
The regulator had earlier found KFA's reply to a show-cause notice, asking why it should be allowed to continue operations, unsatisfactory and is expected to submit a report to the aviation ministry that would decide the fate of the airline.
The airline said that as part of a new "holding plan" operations to several stations had been temporarily suspended. "Since we could resume operations after getting re-capitalised, most staff at these stations have been asked to stay at home whilst remaining on the company's rolls," the airline said. It, however, said it would like to retain staff and access funds to pay outstanding salaries.
"We are in a "holding" pattern right now and are waiting for various decisions from the government and our consortium of bankers on the FDI policy, working capital funding, etc. All of these will have a major impact on the staffing decisions," it said.