India's struggling Kingfisher Airlines was forced to cancel more than 30 flights on Wednesday after pilots and engineers refused to show up for work because of unpaid salaries. The carrier's shares slid to a new record low of 8.61 rupees on the back of the news.
The cancellations were a fresh blow to the debt-laden airline which has been hit by a series of similar strikes in recent months and owes vast sums to banks, suppliers and staff.
Around 22 flights originating in New Delhi were cancelled, along with nine from India's financial centre Mumbai.
An airline spokesman declined to comment on the latest stoppage, but a Mumbai airport official said Kingfisher cited "operational reasons" for the cancellations.
"For the past five to six months, the airline is defaulting on paying us salaries, despite several promises," a junior Kingfisher pilot who declined to be named told AFP.
"How long can one work without being paid?" the pilot said.
Kingfisher, which has $1.4 billion in debts, has been forced to slash its fleet of aircraft and has halted international operations in an effort to curb costs.
This has boosted fortunes for its rivals such as Jet Airways and low-cost carriers SpiceJet and IndiGo, which have raised ticket fares and attracted new passenger traffic.
Last week, Jet and SpiceJet both reported unexpected quarterly profits, prompting upgrades by some brokerage firms.
But India's still-growing aviation sector will continue to face headwinds, due to high fuel costs, fierce competition, regulatory concerns and shabby airport infrastructure, analysts said.
A quarter of Kingfisher is owned by local banks and some have refused to lend the company more cash unless fresh capital is raised.
Kingfisher, which has never posted a profit since its launch in 2005, now has the smallest market share among Indian airlines at 4.2 percent, after being the second-largest carrier at its peak.
Analysts do not expect it to show a turnaround.
"The time has come for the airline to stop all operations, completely restructure the company and management, while paying back its dues," said Sharan Lillaney, analyst at Mumbai's Angel Broking.
Lillaney said the strike was futile as "the airline had no money and is going down".
The airline's owner, liquor baron Vijay Mallya, has been unable to find investors willing to pump money into the airline.
He hopes the government may soon clear a stalled proposal to allow foreign carriers to invest in domestic airlines, seen as a potential lifeline for airlines such as Kingfisher, named after Mallya's flagship beer label.
Kingfisher is set to report on Thursday its first-quarter earnings to June.
In May, it announced quarterly losses tripled to 11.52 billion rupees ($210 million) for the three months to March from a year earlier.
Tweet Bookmark Print Badge the Comments! Give badges to the best comments you see! You will get four badges a day 0 Comments To have full access to the interactive features available in Haveeru Online please register or sign in. or Post a Comment Loading comments... Please wait
No comments:
Post a Comment