New Delhi: India's debt-laden Kingfisher Airlines Ltd cancelled about 41 scheduled flights across its network on Saturday, after some of its staff stayed away from work because of non-payment of salaries and other dues for the past five months, media reports said.
The airline, which has a huge debt of over Rs 75 billion and needs to urgently tie up funds to stay afloat, said that 75% of its employees got their salaries on Friday, while remaining will be paid by Monday.
"This only makes my recapitalization efforts more difficult by causing concern and apprehension among our potential investors," Kingfisher's Chairman Vijay Mallya said in an email sent to employees on Saturday.
Kingfisher cancelled twelve flights from New Delhi, six from Mumbai and three flights from Bangalore and many other flights from Chennai, Chandigarh, Dehradun and Dharamdhala, among others.
The carrier, which has never made a profit since it started operations in 2005, has been forced to cut operations to minimal over the last few months as rising fuel costs and fierce competition hurt profitability. The airline had said that it will operate only around 120 daily flights with 20 aircraft.
Lenders to Kingfisher have asked the airline to bring in equity from investors or infuse funds from its promoter's liquor business to pay off its debt, the Reuters reported Tuesday citing Chairman of State Bank of India Pratip Chaudhuri, days after the company was given 15 days by the banks to come up with a revival plan.
Earlier last week, the lenders gave the company 15 days to formulate a revival plan and present a valuation of its non-core assets that the airline intends to sell to repay its debt.
As per a study by Centre for Asia Pacific Aviation, Kingfisher needs at least $500 million immediately to keep its operations running, but lenders have become hesitant to funding it further in view of its precarious financial condition.