Curtain Call

For months on end, Kingfisher was not caught in turbulence, it was turbulence itself. Hence, the decision to go in for an emergency landing is long overdue. After much hemming and hawing, the Director-General of Civil Aviation’s decision to suspend the flying licence of Kingfisher Airlines earlier this week, could be the end of the road for Kingfisher. A clueless management, indifferent service, little or no commonsense in managing debt, a fatalistic attitude towards the doomed Air Deccan business, and ill-timed ramp-ups were equal contributors to the carrier’s debt burden of over Rs 7,500 crore and operational losses of over Rs 8,000 crore piled up in just over six years. Over two-third of the debt weighing down Kingfisher’s once promising young wings had not been repaid as early as January this year, when principal lender State Bank of India declared its advances to Kingfisher as non-performing assets.

For the lender consortium of 17 banks, it’s Hobson’s choice, for even asset sales may help them recoup just about 15 per cent of their debt. They had reposed a fierce, if not desperate faith in Kingfisher strongman Vijay Mallya’s ability to repay their money. However, Mallya’s take on this misplaced faith was more in the nature of a fait accompli when it came to returning borrowed money. For a start, there was no clear will or visible plan to service the debt; more evident was a choreographed stoicism with the Mallya brand of recklessness brewed in. It is to the credit of Kingfisher employees, spurred in recent months by the unfortunate suicide of an employee’s wife, that they decided to take the airline and its boss head-on and demand a revival plan and clarity on its flight operations.

Throughout, there was the fervent hope of an end-to-end revival plan from Mallya benefiting the industry, stakeholders and employees. But, the king of good times was leading on his merry party with some diligent holidaying. The airline’s indifferent response to DGCA’s request for a recovery plan,—even as Mallya was directing his ample energies towards the Formula I race scheduled in Delhi for October 26—is disappointing. The licence suspension could smush Kingfisher’s efforts to bring in a strategic investor. The welcome aspect of this squalid saga is that the company is making some efforts in speeding up salary payments. On Monday, it promised to pay three months of salaries to employees. Hopefully, the promise won’t be another candle in the wind.