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With Kingfisher lenders deciding to start the process of recovering outstanding loans from the grounded airline, employees of the carrier have said that they are working on moving the Delhi High Court for recovery of their salaries.
“There are no hopes left for us as the management cannot be trusted on payment of salaries. We are working on documents and building a consensus among employees to move the Delhi High Court seeking release of our salaries,” said Delhi-based employees’ representative of Kingfisher Airlines, SC Mishra. Employees of the carrier have not received salaries since June 2012.
After a meeting with Kingfisher, the banks yesterday announced that the airline management has failed to come back with a specific positive action plan on restarting their operations. The airline owes around Rs 8,000 crore to a consortium of banks led by State Bank of India.
Officials of the banks said that they will start the recovery process of the loan soon and the individual bank’s board have to take a call on the method to be followed.
“We will start with the shares pledged with us and evaluation of assets will also start eventually,” said a head of a public sector bank.
A lot of the airline’s assets has been put up as collateral against loans and includes its office in Mumbai. The promoter of the airline, Vijay Mallya, has also given personal guarantees for some of the loans.
Kingfisher has not been operating since October and has never made a profit since it began flying in 2005. Apart from the banks, the airline also owes money to airports, fuel suppliers and its staff. Even with no operations, the airline posted a net loss of Rs 755 crore in the third quarter of the current fiscal.
Meanwhile, the government has clarified the government cannot do much in the case of Kingfisher. “Unless the Directorate General of Civil Aviation is satisfied that the airline can provide safe and viable service there is no question of renewing the licence. What the airline does with the banks is between them,” said civil aviation minister Ajit Singh. Shares of the carrier tanked 4.94 per cent to close at Rs 10.58 at the BSE on Wednesday.