JOIN USThe revival plan of Vijay Mallya-led Kingfisher Airlines’ (KFA), submitted to the Director General of Civil Aviation (DGCA) recently, may not garner the response the cash-starved airline promoted by Vijay Mallya is expecting.
Answering a specific question from Deccan Herald on Tuesday, Arun Mishra, DGCA said, “There is nothing much in the revival plan apart from funding from the UB Group. But we are still examining it.”
KFA Chief Executive Officer Sanjay Agarwal had submitted the new start plan on Wednesday last, but sources said that it was not concrete and several of the airline’s past problems continue to plague it, including the issue of delayed salaries and unsettled term loans from banks and private lenders.
Kingfisher Airlines owes over Rs 7,500 crore to banks and the action by lenders is seen as a big jolt to Vijay Mallya's plans of reviving the airline. The airline was grounded in December 2012, after its licence was suspended by the DGCA following unrest by the employees and disruption of flights. It has not operated a single flight since early October last year. Kingfisher, while maintaining that the new plan has proposed solutions for problems faced by the airline, said it plans to restart operations with five Airbus aircraft and two ATRs if the licence is renewed.
However, sources said that the plan does not contain no-objection certificates (NOCs) from various agencies it owes money to, including the Airport Authority of India (AAI) and the tax authorities. “The NOC from AAI is a must,” a source said, adding that it was one of the pre-conditions that the DGCA had laid down for the airline reviving operations.
The proposed funding from UB Group (Kingfisher’s parent company), sources say, might not be adequate to resolve the deep financial crisis that the airlines has mired itself in.
However, KFA representatives told Deccan Herald on condition of anonymity, “We will tie up all the lose ends and are looking forward to getting the licence renewed.”
They, however, refrained from commenting on the status of the proposal with the DGCA. “We cannot comment on what the DGCA is doing with our proposal and whether or not they have contacted us,” one of them said. The Kingfisher stock was below the 5 per cent mark for a second consecutive day closing down 4.70 per cent at Rs 6.89 on the Bombay Stock Exchange after the company said that lenders have sold an additional 26.86 million equity shares held by its promoters in the open market.
The stock has fallen 54 per cent so far in calendar 2013.
The company said in a filing on BSE that following the sale, the combined holdings of Kingfisher Finvest India and United Breweries (Holdings) in the airline has declined to 28.57 per cent after invocation of pledge by lenders. Kingfisher Finvest India and United Breweries (Holdings) held 32.29 per cent stake in the airline at the end of the December 2012 quarter.