Kingfisher submits interim revival plan to DGCA
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Kingfisher submits interim revival plan to DGCA

Last Updated: Tuesday, December 25, 2012, 08:56
 
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Kingfisher submits interim revival plan to DGCA
New Delhi: After remaining grounded for three months, beleaguered Kingfisher Airlines today submitted an interim revival plan to aviation regulator DGCA on resuming limited operations, but it would not be able to take to the skies before its flying licence expires on December 31.

After the Directorate General of Civil Aviation (DGCA) examines the financial and operational plan, submitted by CEO Sanjay Aggarwal, and decides to allow Kingfisher to fly again, the airline would take another six-eight weeks to resume operations, DGCA sources said here.

On October 20 DGCA had temporarily suspended the SOP of the Vijay Mallya-promoted carrier following a strike by its pilots and engineers over non-payment of salaries for several months, completely grounding its fleet. The SOP is in any case due to expire on December 31.

As per the plan submitted on Monday, Kingfisher would resume operations with five Airbus and two ATR turboprop aircraft and scale it up to an 11 ATR and 10 Airbus fleet within 10 weeks.

At the meeting Aggarwal had with DGCA chief Arun Mishra, it was indicated that Kingfisher would require about Rs 652 crore over the next 12 months for running its operations. These funds would come from the UB Group's resources as banks were unwilling to fund the cash-strapped airline.

Out of the Rs 652 crore that the airline would need to restart operations, Rs 120 crore would be needed to meet salary arrears for its employees.

The Kingfisher CEO is understood to have informed DGCA that the salary dues would be cleared by giving two months' wages and back wages each month from next month onwards.

In addition, funds would be required to refurbish the aircraft, including their engines. The airline's pilots would also have to undergo refresher training and medical tests before they can start operating flights again.

Kingfisher officials claimed that there were no dues against oil companies, barring interest payments due to HPCL.

The airline would have to meet the dues it owe to airport operators, including the Airports Authority of India (AAI) to which it has an outstanding of over Rs 250 crore.

The sources indicated that prima facie Kingfisher would have to submit more details to the DGCA before any permission can be given for restarting the airline.

"There is no date yet for the airline restarting operations. It will take the DGCA a few days to examine the airline's interim plan. After the DGCA gives the airline the go ahead, it will take another 6 to 8 weeks for the airline to begin operations," one of the sources said.

According to the sources, the aviation regulator would like to support the beleaguered carrier but want it to have a sustainable system and not resume its operations in "fits and start".

The sources also indicated that the submission of the plan by Kingfisher was an attempt to build investor confidence in the airline.

Kingfisher had a few weeks ago submitted an application for renewal of its flying permit expiring this month-end. But a decision to renew or revoke its suspension cannot be taken till it submitted a comprehensive financial and operational revival plan that was given on Monday.

The cash-strapped airline is yet to pay its staff for seven months now. Mallya told the 17 lenders consortium weeks ago that he was preparing to restart limited operations with a planned fund infusion of Rs 425 crore through internal resources.

"We will restart operations in a phased manner and will provide funding ourselves. We have not asked the banks for any support. We have also shared full recapitalisation plan (with the lenders) which will be further discussed with a small designated group of bankers," the airline had then said.

Kingfisher, which has a debt of nearly Rs 8,000 crore and accumulated losses and liabilities of a similar amount, has been grounded since October one after its pilots and engineers went on strike.

PTI



First Published: Monday, December 24, 2012, 16:10


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