The end of the Kingfisher Airlines saga?

Courtesy flightglobal.com

IF you were an employee of bankrupt Kingfisher Airlines and who has not been paid for seven months, would you accept an offer from the airline to be paid three months on condition that you return to work? That’s the deal that Kingfisher is dangling before the striking staff.

However, that outcome withstanding, the Indian authorities have suspended Kingfisher’s licence until it could outline a plan to the satisfaction of the authorities of a financially sound and operationally safe future. Kingfisher, deeply indebted to airports, tax agencies and creditors, has never posted a profit since its launch in 2005. Is this the end of its saga?

But Kingfisher chief executive Sanjay Aggarwal continued to hold out hope of resuscitation. He reportedly informed Reuter news agency: “We are continuing discussions on recapitalisation. Those discussions slowed down but they are not stalled.” And he believed Kingfisher staff would be back at work within a couple of days – ahead of the government’s review of its suspension, which should nonetheless view this as a positive development albeit an inadequate one.

Kingfisher’s last straw of hope lies in the Indian government’s relaxation of the restrictions on foreign ownership of domestic airlines, allowing a stake of up to 49 per cent. There had been rumours about Kingfisher engaging in talks with interested foreign investors, but a white knight has yet to appear on the horizon.

Any potential investor is likely to take a closer look at the Indian aviation landscape where cut-throat competition has led to the downfall of numerous carriers, amongst them Air Deccan which was acquired by Kingfisher after three years of operations. Is there something anemic about the Indian aviation industry, though one would expect a growing demand for air travel in a country as populous as India that is at the same poised as an emerging Asian economic power? Or is it just the way things come and go in the world’s largest democracy? C’est la vie.

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About David Leo
David Leo has more than 30 years of aviation experience, having served in senior management in one of the world's best airlines and airports. He continues to maintain a keen interest in the business, writes freelance and provides consultancy services in the field.

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