Now, Kingfisher Airlines to delay salaries

MUMBAI: Kingfisher Airlines has warned its 6,000 employees of a delay in salary payment. In an email, its executive vice-president Hitesh Patel has asked its employees to be prepared for delayed salaries and embarrassing dealings with unpaid vendors in the coming days. Mr Patel said the company was in a tight situation regarding finances and it had trimmed its fleet to 69 from 89 to cut costs.

���Along with all other airlines, we are in a tight situation regarding finances. You can expect to be in embarrassing situations with our vendors; your salaries may be delayed, but never beyond the seventh (day of the month). Please remember, even as you read this mail, the chairman is out there, fighting a lonely and difficult battle to manage funds so that the salaries can be paid on time,��� the mail read.

Kingfisher Airlines chairman Vijay Mallya this evening clarified in a statement that a delay in salary payment till seventh day was ���as per law���. He said the move was aimed at aligning salary remittance dates to revenue collection dates. ���If we pay salaries before the legally due date what���s the problem?��� he asked.

Kingfisher Airlines��� outstanding to oil marketing companies namely Indian Oil, Hindustan Petroleum and Bharat Petroleum stood at Rs 950 crore on May 31. It has a total debt of Rs 8,000 crore.

The company���s quarterly loss widened, hit by falling passenger demand due to the global slowdown. Its net loss in April-June increased to Rs 240 crore from Rs 158 crore a year ago.

The airline also said it plans to raise Rs 500 crore through a rights issue, a follow on public offering or a placement of depository receipts.