Kingfisher’s woes continue as realtors slap eviction notice
04 May 2012
Kingfisher, the most crippled of India's private airlines, was today staggered further as two real estate developers slapped eviction notices on it for defaulting on rent payments since last November.
A PTI report said sources in Kingfisher Airlines have confirmed the development and that the management was negotiating with the developers to resolve the deadlock.
The cash-strapped airline has a rented property in the fairly upmarket Mumbai suburb of Andheri (East), from where it is running a part of its operations. The main administrative office is located at Kingfisher House, which liquor baron Vijay Mallya has been planning to monetise to raise working capital for the airline.
"Senior Kingfisher representatives are in talks with the developers for quite some time now to arrive at a solution," Kingfisher Airlines sources told the news agency. It said there was no official response from the airline.
The notice by Mumbai-based developers Samruddha Realtors and Dhruvam Realtors, understood to have been served on 11 April through their solicitors, gives a month's time for the airline to vacate the space held by it at Andheri.
Kingfisher has been struggling for survival for nearly a year and has been defaulting on payments for lease rentals, fuel purchases, landing and parking fees, and various taxes. Income tax and service tax authorities have frequently frozen its bank accounts for defaulting on payments.
The airline carries a debt burden of over Rs7,000 crore, and an accumulated loss of Rs6,400 crore. It also owes around Rs280 crore to the Airports Authority of India and Rs518 crore to Hindustan Petroleum in fuel and parking dues.
Mallya, known for his flamboyance, made enough money from selling poor-quality liquor and beer in India's highly controlled alcohol market to buy himself an airline. However, Kingfisher Airlines has never made a profit since it started operations; and now threatens to take its owner down with it.
