More than 12 years after one of India’s biggest airlines went bust after mounting huge losses, ex-employees have finally been paid their owed wages after regulators unearthed nearly $35 million in assets.
The news is the latest twist in the wild story of Kingfisher Airlines, an airline created by a brewery tycoon who is wanted in India for economic crimes but who remains on the run in London despite all appeal avenues against extradition being exhausted.
Indian regulators uncover $35 million to pay owed wages
Last week, the Enforcement Directorate of India’s finance ministry announced that it had facilitated the restitution of 311.67 Crore (US $34.9 million) in unpaid wages to former employees of Kingfisher Airlines.
The airline went bust in October 2012 after making huge losses that eventually led India’s Directorate General of Civil Aviation to pull its flying licence. Once one of India’s most popular and biggest airlines, Kingfisher Airlines stopped flying overnight.
In the aftermath of the airline’s collapse, scrutiny fell on its chief executive, Vijay Vittal Mallya, who is the chairman of India’s United Breweries and who named the carrier after one of India’s most popular beers.
Indian regulators were able to recover the money by selling shares in the company, which has now been passed to the airline’s liquidator so that it can be passed onto former employees.
Kingfisher Airlines failed despite its popularity
Kingfisher Airlines was established in 2003, and it started flying two years later. Initially, the airline started as a domestic carrier before expanding into long-haul international operations in 2008.
The airline quickly gained market share and became one of India’s biggest carriers. Despite its apparent meteoric success, behind the scenes, the airline was building up huge losses.
Kingfisher’s downfall is often linked to the acquisition of a rival budget domestic carrier, which led to the financial situation at the airline becoming so unstable that it was unable to pay tax dues to the Indian government.
Ultimately, aviation regulators became so concerned about Kingfisher’s operation that it withdrew the carrier’s flying licence, although by that time, the airline was a shadow of its former self.
The founder remains a fugitive in London
In the aftermath of the airline’s collapse, regulators started to look into possible financial crimes committed by Mallya and other executives at Kingfisher. In 2014, the investigation had uncovered “large-scale diversion and siphoning of loan funds,” which led to a warrant for Mallya’s arrest being issued.
By this point, however, Mallya had fled to London, where he has remained since. The Indian authorities have called on the British government to extradite Mallya so that he can face a court trial, but despite exhausting all legal avenues in 2020, he remains in the UK.
The exact reason Mallya’s extradition still hasn’t been enforced remains unclear, although it’s believed he may be trying to apply for asylum in the UK.
