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KFA faces licence cancellation as employees protest

Oct 06, 2012 07:42 AM IST Business Business

New Delhi: More trouble for Vijay Mallya owned Kingfisher Airlines as the Directorate General of Civil Aviation (DGCA) has now issued a show-cause notice to the airline asking why its flying permit should not be cancelled. The airline employees staged protests across the country over non-payment of salary on Friday. Kingfisher employees were out on the streets - a nationwide protest launched against the management for not paying salaries for the last six months.

The employees say that they don't have any confidence left in the authorities and that is why they don't want to hold any more meetings because meetings are not fruitful. The lenders' decision to release Rs 60 crore is a small relief to the cash-strapped airline. But Kingfisher says it is simply not enough.

The wage bill at Kingfisher Airlines is around Rs 20 crore per month. Only half the employees were paid in March and the employees' dues are at least Rs 130 crore. Kingfisher Airlines management said that it can pay only two months salaries at best.

With the situation going from bad to worse the Civil Aviation Ministry is threatening tough action against the airline. Minister Ajit Singh said, "The licence can be suspended and a show cause notice can be issued. The legal options are being looked at."

With such developments, Vijay Mallya could be made to answer personally. The politics of the situation aside, fact remains that the Kingfisher crisis is no longer a business failure. If the company fails there will be thousands of employees who will go down with it. Like one of the employees' wife, whose suicide note stated financial duress as the reason for her ending her life.