MUMBAI–Kingfisher Airlines Ltd.’s 532747.BY +5.00% operations will remain suspended for the time being, Chief Executive Sanjay Aggarwal said Wednesday, in an indication that renewed talks between senior management and striking employees have not found a breakthrough.
Senior executives from Kingfisher as well as parent UB Group 507458.BY +4.13%met employees earlier in the day to persuade them to call off their ongoing strike and return to work.
The meeting “made good progress” but more talks will have to be held, Mr. Aggarwal told reporters.
Kingfisher, named after India’s top-selling beer brand, hasn’t paid salaries since March, and its pilots, engineers and technicians have been on strike since Oct. 1 in protest.
This has forced the airline to suspend all flights. Last week, the airline said it has suspended operations till Oct. 20.
The date is key because it is the deadline given to Kingfisher to show India’s aviation regulator that it has a viable operational plan, and that its license shouldn’t be cancelled.
The airline owes almost $1 billion to its suppliers, leasing companies and majority shareholders, according to a recent report by Sydney-based consultant CAPA-Centre for Aviation. The airline owes about $1.5 billion to banks, out of which it has defaulted on at least $150 million, according to its latest annual report.
Kingfisher has made constant losses since its inception in 2005 due to high fuel prices, interest costs, bleeding international operations and competition from low-fare carriers.
Once India’s second-biggest carrier by market-share, it has in the past one year slashed its operations by a fourth of its original 400-flights-a-day schedule and is now the country’s smallest airline. It has also stopped its overseas operations.
Mr. Agarwal’s comments Wednesday came just before the Bombay Stock Exchange closed for the day.
Earlier in the day, Kingfisher shares–boosted by hopes that Wednesday’s meeting would find a solution–had risen by their daily limit of 5% to 12.60 rupees in a market which ended 0.18% up.
Source : http://online.wsj.com/article/SB10000872396390444734804578062162089910272.html