Kingfisher Airlines Cancels All Flights, Declares Partial Lockout

Kingfisher Airlines Cancels All Flights, Declares Partial Lockout:

NEW DELHI—Kingfisher Airlines Ltd. 532747.BY -5.19% declared a "partial lockout" Tuesday and canceled all flights through Thursday because of continued strikes and alleged agitation by some employees.

"Following a series of protracted and unabated incidents of violence, criminal intimidation, assault, wrongful restraint and other illegal acts including refraining from attending work by a small section of recalcitrant employees—which were all unnecessary and unprovoked—the management has been forced to declare a partial lockout at the airline, effective immediately," the airline, controlled by liquor tycoon Vijay Mallya, said in a statement.

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Reuters

Kingfisher Airlines planes at New Delhi airport earlier this year; the carrier canceled an unspecified number of flights Monday as labor unrest continued.

Kingfisher Airlines didn't say how many flights it operates each day.

The move follows the cancellation of several Kingfisher flights Monday owing to the strikes. Kingfisher didn't say how many employees are striking, or the reason.

Kingfisher said Tuesday "a vast majority" of employees wanting to work are being threatened by the strikers. It asked all striking employees to return to work, saying it will seek a resolution in talks before taking legal action.

The airline is in financial difficulty, resulting in the late payment of salaries. A senior Kingfisher pilot Monday said pilots, engineers and technicians haven't been paid for several months. A second pilot added that crew won't resume work until they are paid.

Kingfisher owes millions of dollars to lenders, suppliers, aircraft leasing companies and taxes to the Indian government.

The airline has yet to post a quarterly net profit since starting operations in May 2005.

Kingfisher Airlines' auditors in a review of the company's April-to-June 2012 results said while the accounts were prepared on a "going-concern" basis—a term that refers to a company's ability to remain operational—its net worth has been eroded.

They also said Kingfisher's ability to function depended on it injecting "requisite funds for meeting its obligations" and on "rescheduling of debt and resuming normal operations."

Last week, Kingfisher spokesman Prakash Mirpuri said the airline is flying only 15 of its fleet of 40 aircraft.

Soon after it began operations seven years ago, Kingfisher announced expansion plans—including the only Indian order until then for the Airbus A380—and a takeover of the then leading Indian budget carrier Air Deccan.

Kingfisher's financial troubles began as the world-wide economic slowdown led to a fall in passengers and rising fuel prices increased costs. The airline, which was once India's second-biggest by market share, is now the smallest.