Kingfisher airlines, which is in headlines for the financial turmoil it is going through has to shut 25 centers, these include Hyderabad, Kolkata, Lucknow, Ahmedabad, Ranchi, Patna, Amritsar, Bhubaneswar, Indore, Kochi, Nagpur, Coimbatore, Bagdogra, Trivandrum and Kochi, company executives told NDTV Profit.
Kingfisher, with a work force of 7,000 employees will soon ask around 3,500 employees to go on so-called ‘leave without pay’, about which the employees will be very soon informed.
Kingfisher airlines was facing loss since 2005 and after acquiring acquiring Air Deccan, Kingfisher suffered a loss of over 1,000 crore for three consecutive years. With the beginning of 2012, the losses achieved a figure of over 7,000 crore with half of its fleet grounded and several members of its staff going on strike. Kingfisher’s position in top Indian airlines on the basis of market share had slipped to 5 from 2 because of the crisis.
The ‘leave without pay’ system will release the kingfisher airlines from paying salary to the employees. If for 3 months, kingfisher airlines fails to pay its employees and did not passed on the tax deducted at source or TDS from their payrolls to the Income Tax department. The tax authorities subsequently will freeze the carrier’s bank accounts.
Shares of Kingfisher Airlines dumped over 6 per cent on the Bombay Stock Exchange.
A.K. Ganguly, the last of two independent directors to quit the airline’s board, last week said it needed at least $1 billion to extricate itself from the financial quicksand it is stuck in.