The shares of cash-strapped Kingfisher Airlines rose almost 10 percent Tuesday on reports of a thaw in negotiations between a group of employees and the management on the salary issue.
The development comes as the airlines employees, who had set a deadline of 8 p.m. Tuesday for payment of their delayed salaries, withdrew their strike threat after a meeting with the top management.
This saw the airlines' scrip at the Bombay Stock Exchange (BSE) touched a day's high of Rs.17.30. The scrip was trading at Rs.16.75 at 1.30 p.m., up 10.93 percent from Monday's close of Rs.15.10
A group of pilots and cabin crew had threatened to go on a strike as they have not been paid for four months. But tempers cooled after negotiations between them and the management.
Kingfisher chairman Vijay Mallya also wrote to his staff to avert the unrest and assured them that their dues would be paid in a phased manner from Wednesday.
"All junior staff will be paid...April 4. All pilots and engineers will be paid April 9 and 10," he wrote. "My focus now is to start paying your seriously overdue salaries."
Mallya assured his employees that he would be available at all major stations from this week to address the staff's concerns.
"Despite all my other commitments to UB (United Breweries) companies, I am personally passionate about and committed to your airline."
The letter stated that the company can now pay the overdue salaries as its bank accounts have been un-frozen following payments worth Rs.44 crore to the income tax department and Rs.20 crore as service tax.
On March 27, the airline suspended operations to several cities and asked its staff to stay at home till it managed fresh funding.
The airline claimed that it had started the summer schedule with about 120 daily flights and 20 dedicated aircraft.
The airline's international operations have been suspended after the International Air Transport Association (IATA) barred the carrier from its inter-airline clearing house and billing and settlement plan accounts due to non-payment of dues.
Kingfisher has a debt of Rs.7,057.08 crore. Its net loss widened to Rs.444.27 crore for the quarter ended Dec 31, 2011 from Rs.253.69 crore in the October-December quarter of the last fiscal.