Kingfisher Airlines, which has cancelled all flights through Thursday, faces a potentially prolonged shutdown until the cash-strapped carrier clears a salary backlog going back half a year.

The government is taking a tougher stance after allowing the airline to operate for months without paying salaries, although it has stopped short of forcing a closure of the heavily indebted carrier. Kingfisher has debt of $1.4 billion, owed mostly to government-controlled banks including State Bank of India, the country's top lender.

The airline, controlled by liquor baron Vijay Mallya, won't get the government's approval to resume flying before it pays staff salaries and submits an acceptable recovery plan, a senior official at the aviation regulator told reporters on Tuesday, declining to be identified as the negotiations are private. Unhappiness among the rank and file came to a head over the weekend when technicians and engineers staged a protest that the airline said turned violent.

Kingfisher has halted all flights since Monday due to the labour unrest and said it will decide on Thursday whether to lift a partial lockout of staff on Friday. The airline loses 40 million rupees a day if it flies and twice that if it doesn't, a senior government source said. The airline declined to comment on its daily losses.

(You need to login first to read complete news).
New User? Register for FREE!
» Back to Travel News