The cash-strapped Kingfisher Airlines has “organised” funding so that it can pay its overdue salaries, the airline Chairman, Mr Vijay Mallya, has told his employees in an email.
Several employees of the airlines have now had to go without salaries for past several months.
“We are currently handicapped as our bank accounts are frozen by the tax authorities. I have been working tirelessly to urgently resolve this issue through negotiations and I hope these efforts will be successful early next week. We fully intend to pay our tax dues as much as we are committed to pay your salaries,” the Chairman's mail states.
The mail adds that last week, the UB Group, the promoters of the airline and its associates acting in concert converted its loans for an additional five per cent equity in Kingfisher Airlines.
“This is the maximum permitted under law in any one financial year but clearly demonstrates the faith that I have in all of you and in our company.”
However, for several employees the mail has come a bit too late.
“I deleted the mail which arrived at 1 a.m. Mr Mallya has sent about three such mails. And not stuck to his word even once. Mr Sanjay Aggarwal (airline CEO) has sent out a similar mail at least twice and still the airline has not kept its promise. The airline Vice-President has sent out some mails giving dates for payment to which also they have not stuck. So what is the sanctity of the current mail?” an airline employee asked.
Mr Mallya's mail, a copy of which is with Business Line , adds that there seems to be some light at the end of a long dark tunnel as the Government has issued a notification allowing direct import of aviation fuel which promises to save the airlines about 15 per cent of its current fuel costs. For most domestic airlines aviation fuel costs is among the largest operating costs.
The airline chairman has also expressed the hope that the next positive move would be the formal notification permitting foreign airlines to invest up to 49 per cent of the equity in Indian carriers.