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Kingfisher will operate 120 daily flights, 20 dedicated planes, no lay-offs


March 27, 2012 - Bangalore/Mumbai

Cash-strapped Kingfisher Airlines on Tuesday said that there would be no lay-off of employees, and added that it would operate 120 flights daily with the help of 20 dedicated planes during the summer schedule.

In a statement, Kingfisher Airlines owner Vijay Mallya said the airlines will return to full operation after fund infusion.

"We are in a 'holding' pattern right now and are waiting for various decisions from the government and our consortium of bankers on FDI (foreign direct investment) policy, working capital funding, etc," Kingfisher said in a statement.

"All of these will have a major impact on the staffing decisions we will have to make," the statement added.

Kingfisher has announced that its immediate priority is to access funds to pay outstanding salaries.

The airline has announced a new plan pending re-capitalisation.

On Monday, the government said that Kingfisher Airlines owed over Rs 5,600 crore to public sector banks as on February this year.

A consortium of 13 PSU banks, including State Bank of India, have an exposure of Rs 5,608.07 crore to Kingfisher Airlines (KFA) as on February 2012, Minister of State for Finance Namo Narain Meena said in a written reply in Lok Sabha.

ICICI Bank has asked Kingfisher Airlines to provide more collateral for loans given to it or face a cut in credit even as promoter Vijay Mallya prepares to present a longawaited revival plan for the teetering carrier on Tuesday.

The demand for more security follows the steep drop in the share price of Kingfisher Airlines and United Spirits Ltd - the two scrips that were pledged to raise funds for the airline, said two people familiar with the development.

Earlier, Kingfisher Airlines had decided to suspend all international flights from March 25 and further curtail domestic operations even as the government warned the ailing carrier that its flying licence could be cancelled if it failed to meet safety norms.

Kingfisher has a total debt of about Rs 7,000 crore and accumulated losses of about Rs 6,000 crore. The financial crunch has hit Kingfisher's operations with dozens of flights being cancelled.

Kingfisher Airlines agreed to pay only up to Rs 10 crore of its Rs 76-crore service tax dues this fiscal, a government official said.

"Kingfisher has dues to the tune of Rs 76 crore; we are talking to them. They will be depositing about Rs 10 crore this month," Central Board of Excise and Customs (CBEC) Chairman S.K. Goel said.

He said the service tax department has been freezing Kingfisher's bank accounts since October due to the non-payment. As of now it has frozen as many as 40 accounts.

ANI

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