Kingfisher Airlines CEO among top-paid executives at UB group

While Vijay Mallya-controlled Kingfisher Airlines (KFA) has been making its pilots and engineers run from pillar to post for their salaries, it gave its chief executive officer (CEO) Sanjay Aggarwal a nearly two-fold raise to take his salary past the Rs 4 crore-a-year-mark, which is among the highest in the industry.

The airline has been temporarily locked out due to employee unrest triggered by non-payment of salaries to its 4,000 staff since March.
 
Agarwal has emerged as the second-highest paid CEO among domestic commercial airlines even as he claims to be the last employee to receive his salary cheque. However, KFA staff doubt his claim. "Well, unlike us, if he does not get his pay cheque, it certainly is not reflected in his lifestyle," a senior KFA employee said.

Agarwal's remuneration in the fiscal year 2011-12 jumped to a whopping Rs 4.01 crore from Rs 2.12 crore in 2010-11 even as the losses of the airline rose over the previous year, the company's annual report shows.

Aggarwal's pay package was the second highest in the last fiscal ended March 31, 2012, according to figures in the annual reports of the seven listed companies of UB Group.

"Aggarwal brought in a recipe for disaster in September 2011 by closing down Kingfisher's lowcost operations (Kingfisher Red), the model he successfully ran as CEO of Spicejet before joining KFA," a senior pilot told Mail Today. "Both IndiGo and GoAir are thriving because of their lowcost operations. It is ironical that he got such a hefty hike while the loss of KFA was mounting," he added. Interestingly, Vijay Mallya had then said, "We don't believe in low-cost operations anymore."

As per the annual reports, company chairman and promoter Mallya was paid a total amount of about Rs 1.43 crore (mostly in sitting fees) from various Group companies. Mallya had got a commission of Rs 51 crore for guarantees extended for KFA loans in 2010-11 but the payment of such commissions has been withdrawn after directions from the consortium of banks, who had taken strong exception to the arrangement. Mallya received remuneration from two overseas subsidiaries amounting to nearly Rs 63 lakh and Rs 76 lakh during the year 2011-12.

According to Jitender Bhargava, former executive director, Air India, KFA was bound to collapse. "It followed a suicidal business model. Had it been the US, it would have completely grounded by now," he said. "No foreign airline can be expected to invest in a dying carrier like Kingfisher."

Bankrupt KFA pulled in pilots from state-run Air India (domestic) offering salaries much higher than industry standards. "Both Air India (domestic) and Kingfisher have a common Airbus A-320 fleet. It was an advantage for Kingfisher to get experienced pilots who were groomed and trained for years at the best available infrastructure and resources at Air India. It was easier for Kingfisher to pay more and get them," Bhargava further said. However, ultimately the massive hikes in salaries contributed to KFA's collapse, he added. KFA's borrowings stood at Rs 8,030 crore on March 31. The airline has defaulted on its payments to banks and its reported loss stood at Rs 7,100 crore as on March 31.

Courtesy: Mail Today