India's Kingfisher halts flights for another week

MUMBAI, India -- India's Kingfisher Airlines has extended its shut-down and won't fly any planes for another week, unless it can convince pilots and engineers who haven't been paid for months to return to work.

Chief executive Sanjay Aggarwal has been crisscrossing the country to meet disgruntled employees but hasn't reached a deal, forcing the airline to prolong the shutdown that was meant to end Friday.

"We regret that the illegal strike has still not been withdrawn and normalcy has not been restored in the company, thereby continuing to cripple and paralyze the working of the entire airline," spokesman Prakash Mirpuri said in a statement.

Workers are protesting over months of unpaid wages. India's airline regulator is worried about safety standards because engineers are on strike and can't certify that the planes are safe to fly.

"What we need is concrete plans from Kingfisher," Civil Aviation Minister Ajit Singh told reporters Thursday. "How will they maintain their schedule and how will they make sure their planes are safe to fly?"

Intensifying doubt that the cash-strapped carrier, once among India's finest, will be able to crawl out from its pile of debt drove the stock down 17.8 percent this week, through Thursday.

The airline's bad news deepened Friday, with a spate of front-page newspaper articles about the suicide of a Kingfisher employee's wife. Before hanging herself, the woman reportedly left a note saying that her husband hadn't been paid for five months and she could no longer cope with the financial stress.

The Center for Asia Pacific Aviation, an airline industry research group, is calling on Kingfisher to shut down voluntarily in order to "reorganize and restructure."

CAPA said Friday that saving the airline would require over $1 billion, including an immediate capital infusion of $600 million. Indian banks, which hold much of Kingfisher's outstanding debt, seem ready to work with the company, rather than face write-downs, but the UB Group, Kingfisher's parent company, would also have to come up with some cash, CAPA said.

Vijay Mallya, who heads the UB Group, is in talks with British drinks giant Diageo to sell off part of his liquor subsidiary, United Spirits.

CAPA puts Kingfisher's outstanding debt at $2.5 billion, including $1.1 billion in bank debt and says its accumulated losses swelled to $1.9 billion by the end of June.

The airline is flying less than one-fifth of the number of planes it was a year ago and its share of the domestic market plunged to 3.2 percent in August, CAPA said.

"Businesses sometimes fail, there is nothing wrong with that," the group said in a statement.