Eight Air India unions threaten strike from April 2, international flights could be hit

Negotiations over unpaid salaries between an Air India pilots' union and the airline’s management in Mumbai on Wednesday have failed.

This could affect international flights as these pilots were earlier with Air India, when international and domestic flights operated separately. The domestic unit earlier flew under the Indian Airlines brand.

Representatives from eight other unions are scheduled to meet with the aviation secretary and Air India management in New Delhi on Thursday.

The group of eight unions says that employees have not been paid for four months and on Wednesday wrote to the Prime Minister seeking his “urgent intervention” in releasing salaries to employees, failing which they will strike work beginning April 2.

The strike will likely affect Air India's international flights.

“We … appeal to you for your kind and urgent intervention to resolve the situation and appeal to you for justice,” the Joint Forum of Guilds/Unions/Associations of Air India said in a letter sent to Prime Minister Manmohan Singh on Tuesday.

The Forum includes the Indian Pilots Guild, Air India Aircraft Engineers Association, Air India Engineers Association, All India Service Engineers Association, Air India Employees Union, Air Corporation Employees Union, Air India Officers Union and Air India Cabin Crew Association, representing almost all classes of Air India’s 33,000 employees.

A majority of employees have expressed their inability to work from April 2 due to non-payment of salaries over several months, the Forum claimed.

“Due to non-payment of wages for an extended time period, the employees are unable to meet their financial commitments and family responsibilities,” the letter said, pointing out that a significant number of them came from “humble background and modest means”.

The letter also pointedly said that “unlike Air India, which can turn to the central government for funds, employees have no such option”.

“The respective employees and their families alone have to suffer the humiliation of loan defaults and ensuing stress,” it added.

Noting that employees have been working and enduring hardship for the past year, the letter claimed that they are “no longer able to bear this agony, which has been thrust upon them for no fault of theirs”.

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Kingfisher to operate only 20 aircraft, no overseas flights: Mallya

Kingfisher Airlines has said it will halt international flights and fly just 20 planes as it seeks funding, hours after the government warned the carrier's license may be canceled if it fails to meet safety norms and financial viability conditions.

The embattled airline, which has debts of $1.3 billion, is scrambling to raise funds after banks refused to lend more for its day-to-day operations.

A big cutback in flights has reduced its revenue, leaving the carrier controlled by flamboyant liquor baron Vijay Mallya with little cash to pay staff, airports, tax authorities and lenders.

"If he gives a plan and says I have that many planes, that much schedule, then why should we cancel?," Aviation Minister Ajit Singh said ahead of Mallya's meeting with the regulator to submit a recovery plan for the carrier.

"The problem is, (in the) last two to three months, he has given several plans and he has not adhered to any of them," Singh said, warning that the airline was liable for prosecution over unpaid taxes.

"If passenger safety is compromised we'll not let any airline fly. Safety norms also involves financial viability," Singh said.

Kingfisher said it had submitted an interim plan to operate 20 planes on between 110 and 125 domestic routes a day, and halt international flights by April 10. The carrier's fleet, which earlier had 64 planes, now has 47.

"We have not submitted an ambitious plan. We have submitted a holding plan," Mallya told reporters.

The company has said it is in talks with potential investors, some of which would require India to allow foreign carriers to own up to 49 percent of Indian airlines, a change the government is considering.

"Some of the potential investments depend on the change in FDI (foreign direct investment) policy but there are other investors we are in discussions with," Kingfisher Chief Executive Sanjay Aggarwal told reporters.

Cancellations have already disrupted the travel plans of thousand of passengers across the country and pushed up fares.

UNFRIENDLY SKIES

Shares of Kingfisher Airlines, which has a market capitalisation of about $200 million, hit an all-time low in early trade on Tuesday before closing 5.5 per cent lower.

Kingfisher has never made a profit in a struggling Indian airline industry that is saddled with high fuel costs, stiff competition and low fares.

Five of India's six airlines are in the red and domestic carriers are likely to lose a total of $2.5 billion in the year through March, according to the Centre for Asia-Pacific Aviation (CAPA), an industry consultancy.

"As a government, we don't want to shut down any industry. There are employees and customers involved. Kingfisher had 22 percent traffic. If we close it suddenly, where will the fares go?," Singh said.

Global industry body IATA has suspended Kingfisher from its settlement system, restricting bookings through overseas agents, hitting ticket sales. On Monday, the last of Kingfisher's independent directors resigned.

The carried needs at least $500 million immediately to keep flying and $800 million to return to full operations, according to CAPA.

Kingfisher's billionaire chairman owns one of the world's most expensive yachts as well as cricket and Formula One teams, but he has been unable to raise fresh equity for an airline that was once India's second biggest by passengers.

"Mallya has been talking a lot about capital but I think he's only doing it to calm the situation and postpone the problems. We have not seen any money," said a senior executive at a state-run bank, which recently downgraded Kingfisher's loan to non-performing status.

There are no provisions for companies to declare themselves legally bankrupt in India.

"Right now, it is a complicated situation. We are closely monitoring," said the banker, who requested anonymity as he was not allowed to talk about clients.

Copyright @ Thomson Reuters 2012

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Kingfisher to suspend all international flights, says Vijay Mallya

New Delhi:  Kingfisher Airlines, owned by liquor baron Vijay Mallya, has decided to end its international flights. The airline, which has a debt of 7000 crores, has committed today to running 125 domestic flights everyday using 20 aircraft. Its fleet number was 64 till a few months ago. Mr Mallya has promised, that unlike in the last few months, these flights will not be cancelled at the last minute because of the airline's expansive financial problems.
Mr Mallya had been summoned to meet the Directorate General of Civil Aviation (DGCA) today to explain recovery plans. Earlier, Civil Aviation Minister Ajit Singh warned that Kingfisher could lose its license if it was not able to furnish a believable turnaround strategy, or if the DGCA found safety being compromised. DGCA chief Bharat Bhushan told NDTV today that a special team conducts safety checks on Kingfisher flights every day to ensure passengers are not at risk.
"The problem is, last two-three months, he has given several plans and he has not adhered to any of them," Mr Singh said. "If passenger safety is compromised, we'll not let any airline fly. Safety norms also involve financial viability," he added. After the meeting with Mr Mallya, the DGCA chief said he had no plans for now to revoke Kingfisher's license.
Mr Mallya said that operating international flights does not make sense given that it has been suspended by IATA which helps airlines by serving as the middlemen between them and various service providers like caterers and ground handlers for passengers and baggage at different airports. Without IATA, Kingfisher would have to handle these payments directly in different currencies - a logistical nightmare. Mr Mallya said that he is not setting an ambitious target for the summer, and said he is hopeful of foreign investment. The government is considering a proposal to allow foreign airlines to own upto 49% of Indian carriers.
Kingfisher employees including pilots have not been paid for several months. Recently, the airline has blamed this on the income tax department which has frozen several of its accounts. Today, Mr Mallya said he hopes to clear all outstanding bills soon for employees.

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