* Entire fleet grounded since Monday
* Shares fall near daily limit for 4th straight session
* Carrier's lenders to meet later on Thursday
By Anurag Kotoky
NEW DELHI, Oct 4 Kingfisher Airlines Ltd's
efforts to resolve a labour dispute were dealt yet
another blow after a group of employees said negotiations in
Delhi had "ended in failure" because the Indian airline did not
commit to paying overdue salaries.
Kingfisher, once India's second-largest airline, is more
than half a year behind on salary payments and has grounded its
fleet since Monday after a protest by engineers over the weekend
turned violent. Talks with employees in Mumbai on Wednesday
ended in a stalemate.
"Employees demanded payment of long pending salary (seven
months) prior to resuming operations. All employees expressed
their keenness to resume work provided their dues are cleared
expeditiously," the group of unidentified employees in Delhi
said in a statement on Thursday.
The shutdown has further dimmed the outlook for the airline
controlled by liquor baron Vijay Mallya. Kingfisher, which has
never turned a profit since its founding in 2005, is saddled
with $1.4 billion in debt, owed mostly to government banks led
by State Bank of India.
The lenders, which have refused to provide more funds
without a capital injection into the carrier, planned to meet
with the airline later on Thursday.
Indian banks rarely pull the plug on big companies, with
state lenders perceived to be especially willing to help out
companies in distress.
"We want a concrete plan from Kingfisher. We need to know
how the capital will be infused and then we can see how banks
can help," S. Vishvanathan, deputy managing director of SBI,
told Reuters ahead of the meeting between the airline and its
"I don't want people to start speculating. This is a routine
meeting to keep ourselves updated," he said.
While the airline has said it is in talks with potential
investors including foreign carriers, none has publicly
expressed an interest in taking a stake in Kingfisher. India
last month allowed foreign carriers to own up to 49 percent in
domestic players, a rule change that was sought by Kingfisher.
NO PAY, NO FLY
"There is a stalemate," Vikrant Patkar, a pilot in command,
told reporters on Wednesday after a meeting with Kingfisher's
chief executive and chief operating officers in Mumbai.
In Delhi on Thursday, several members of Kingfisher's ground
crew outside the hotel near the airport where the meeting took
place said they were willing to return to work.
A company official also said some employees in Delhi had
agreed to go back to work, and that the airline expected to
resume operations in four or five days.
"About 100 people here agreed to return to work
unconditionally," Sanjay Bahadur, vice president of corporate
affairs, had told reporters after the meeting.
He also said the airline expects to pay salaries for March
"within a week or so."
However, the later statement by a group of pilots and
engineers based in Delhi said the talks had collapsed.
An official with India's aviation regulator said on Tuesday
that Kingfisher would not get government approval to resume
flying unless it pays salaries and submits an acceptable
Kingfisher's website was not accepting bookings for flights
before Oct. 8.
Before this week's shutdown, Kingfisher operated just 10
planes out of a fleet that once numbered 64, and its market
share was the smallest among India's six main carriers.
Kingfisher's troubles have enabled India's other airlines to
push up fares in a market long characterised by fierce
competition and overcapacity.
Shares in Jet Airways India Ltd and SpiceJet Ltd
rose 2.4 and 2.7 percent, respectively, on Thursday.
Kingfisher shares fell 4.8 percent to 13.90 rupees,
effectively at their daily limit of 5 percent for the fourth