Will Kingfisher's last-ditch effort work?

With no end in sight to the 16-day impasse over a lockout and strike by its workers, Kingfisher Airlines management has called a meeting with their representatives on Wednesday in a last-ditch effort to convince them to return to work.

The meeting, scheduled in Mumbai, is likely to be attended by top officials of the parent company, UB Group, apart from the airline top-brass.

It comes three days before the lockout, imposed by the airline on October 1 and extended till October 20, is to end. All flights across its network have remained cancelled since then.

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The liquor baron Vijay Mallya-owned carrier would also have to submit its reply to the Directorate General of Civil Aviation's (DGCA) show-cause notice by October 20.

The aviation regulator had served the notice on October 5 asking why its flying license should not be suspended or cancelled due to grounding of its entire fleet and saying it had failed to offer safe, efficient and reliable service. It had given the airline 15 days to reply.

The staffers, who struck work on September 30 protesting delay in salaries, are insisting they would resume work after their seven-month dues were paid. Accusing the management of not fulfilling their earlier promises, employees sources said. they wanted concrete assurances about payment of their dues.

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Airline sources said the management's efforts would be to find common ground for breaking the impasse and resume operations as soon as possible, saying both sides realise that keeping the aircraft on ground would not help.

Earlier several rounds of meetings have been held between the two sides, but to no avail, while the staffers have taken out protest demonstrations in various cities.

Civil Aviation Minister Ajit Singh has also said the airline would have to submit a concrete plan to DGCA on safety and salary payments, before it is allowed to resume flights.

Kingfisher has been saddled with a loss of Rs 8,000 crore and a debt burden of another over Rs 7,000 crore, a substantial part of which has not been serviced since January.

The airline got some reprieve as bankers agreed to release funds of up to Rs 60 crore from escrow accounts for the carrier to make salary payments.

Maintaining that they were yet to receive any payment, the employees also said that the Income Tax Department has raised a tax demand on them and claimed that the company has not given the Form 16 to them for about three years.

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Keeping all these factors in mind, the DGCA was studying the legal implications of cancelling or suspending the airline's flying licence in view of large debts Kingfisher owes to its creditors, including some state-owned banks.

Official sources said the assessment would offer some clarity on Mallya's liability depending on whether the airline shuts down on its own or the government cancels its licence.

Kingfisher was issued an airline licence on 26 August 2003. It was actually issued to Air Deccan which was taken over by Kingfisher. The licence is valid till December 31.