In the “this is not a good sign department”: Struggling Kingfisher Airlines has not paid employees since December, adding to the signs that the carrier may not make it.
You may remember that the Indian airline “postponed” entry into Oneworld a few weeks back to deal with some financial issues. Apparently not paying its employees was one of those issues.
The airline’s CEO blames the non-payment on unexpected emergency payments that needed to be made in December, but really the problem is the rather massive (7,000 crore Rupees, or as we would say, $1.4 billion) debt that they’re sitting on.
Kingfisher isn’t the only Indian airline in trouble: Jet Airways has not paid its employees for January yet. Combined, the two airlines, which may not survive much longer, employ 18,000 people.
The Indian airline industry has struggled with overcapacity, brutal fare competition, and, of course, protectionism, keeping foreign investment in airlines to a minimum. They also require startups to fly for 5 years before permitting them to fly internationally, forcing new carriers to compete in the brutal domestic market.