Kingfisher to pay January salaries from May 9

Worried over the possibility of its employees dragging the airline management to the Labour Court over non-payment of salaries, Kingfisher Airline Chairman Vijya Mallya has "assured" the staff of paying their January salaries from Wednesday onwards, airline sources said on Monday.

"Mallya said in his May 5 communication to the employees that the airline will start remitting January salaries from May 9 onwards," sources said quoting from the e-mail message.

In his e-mail message Mallya also said that a "significant" portion of the February salaries would be paid by the month-end, they said.

Mallya's communication to employees comes following its pilots serving a deadline of May 8 to the management for paying January salaries or face strike.

Besides, they had demanded that the management should also clear the remaining salary in a phased manner by June 30.

A section of the staff including pilots and engineers had last week said that they were contemplating moving to the Labour Court to seek its intervention and expedite settlement of their dues.

Meanwhile, Mallya has also expressed hope that the airline would return to the global distribution network of IATA shortly, sources said.

Beleaguered Kingfisher Airlines was suspended for non-payment of dues by the IATA in March from participating in a system which enables airlines to settle their interline billings globally.

Airlines and airline-associated companies join the IATA Clearing House to settle accounts for services provided by them to other airlines or firms.

Kingfisher Airlines has been facing financial troubles for almost a year now.  The airline, which never made a profit since its inception in May 2005, reported a net loss of Rs444.26 crore in the December quarter. It suffered a loss of Rs1,027 crore in 2010-11 and has a debt of Rs7,057.08 crore.

Due to the paucity of funds, it now operates only 110 flights a day with a fleet of 20 aircraft against 400 flights per day last year with 66 planes.

The airline had a 6.4% market share in March, and ranked below the budget carrier GoAir, which cornered 7.5% market share in the same period.