Kingfisher Scraps 40 Flights as Workers Protest Wage Non-Payment

Kingfisher Airlines Ltd. (KAIR) canceled about 40 flights after some employees refused to work as they haven’t been paid, prompting Indian billionaire Chairman Vijay Mallya to say they may hamper efforts to revive the carrier.

“Damaging the future of Kingfisher in the public eyes is not going to produce cash,” Mallya said in a letter to employees posted on the company’s website today. “This only makes my recapitalization efforts more difficult by causing concern and apprehension among our potential investors.”

More than 75 percent of employees received their salaries on the “committed” date of July 13, Kingfisher said in a statement today. The company said it has assured staff the rest will get paid on July 16. The airline is operating 20 planes after reducing services to about 120 a day, compared with 66 aircraft and about 340 daily flights in March 2011.

Kingfisher’s market share in April dropped to the lowest among India’s six airline operators from second in October as it ended a discount service and grounded planes following more than 10 quarters of losses.

Kingfisher may post a loss of as much as 14 billion rupees ($254 million) this fiscal year and needs about $1 billion of funds, CAPA Centre for Aviation, an industry consultant, said in May. The airline has pledged its brand, office furniture and other assets against 64.2 billion rupees of debt, Junior Finance Minister Namo Narain Meena said in parliament in New Delhi on Dec. 9.

“We worked hard to gain the trust and confidence of our guests,” Mallya said. “Today, by forcibly canceling several flights we have lost most of that.”

To contact the reporter on this story: Pratik Parija in New Delhi at pparija@bloomberg.net

To contact the editor responsible for this story: Paul Tighe at ptighe@bloomberg.net;

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