Kingfisher Cancels Flights on Labour Woes

Kingfisher, which is  need of capital to keep flying, said earlier in the day it had cancelled some flights because of problems with staff, who have not been paid for months.

Cash-strapped Kingfisher Airlines cancelled all of its flights on Monday due to staff unrest, adding to doubts about the ailing private carrier's future and sending its shares plunging.

Deputy director-general of India's civil aviation regulator, RK Khanna, , said no Kingfisher flights had operated Monday and that they had summoned the carrier's chief executive Sanjay Agarwal to discuss the problems on Tuesday.

India's second-largest airline company of a year ago, but now has a market share of only 3.2 per cent of the country's smallest carriers. Kingfisher shares fell to their highest permissible daily limit, ending down 4.78 per cent at Rs 15.35 on the Bombay Stock Exchange after the news.

Press Trust of India news agency said demand unpaid wages for seven months went on strike for a few Kingfisher engineer.

Kingfisher Airlines Vijay Mallya, the billionaire owner Mallya, said last week that he was negotiating with foreign airlines. Stake in the firm after the government relaxed foreign investment rules.

Also last week, local banks - which is only a quarter of Kingfisher - and rejected a request for the loan company.It's hard to expand more quickly, hit by intense competition and high fuel prices.