New Delhi, India: In a significant relief to thousands of former Kingfisher Airlines employees, the Enforcement Directorate (ED) has enabled the release of ₹312 crore towards long-pending salary and service dues, ending a 12-year wait since the airline ceased operations in 2012.
The payout follows an order passed by the Debt Recovery Tribunal (DRT), which allowed restitution of funds attached under the Prevention of Money Laundering Act (PMLA). The ED facilitated the transfer after receiving legal clearance, marking one of the largest employee restitution exercises in India’s aviation sector.
According to official statements, the amount will be distributed among former pilots, cabin crew, engineers, and ground staff who were left unpaid when the airline collapsed in 2012. Many employees had faced prolonged financial distress, with legal proceedings stretching over several years.
The attached funds originated from assets linked to defaulter Vijay Mallya, the former promoter of Kingfisher Airlines, whose properties were seized as part of multiple investigations into loan defaults and alleged financial irregularities. The ED clarified that the restitution aligns with the agency’s mandate to prioritise compensation to victims under the PMLA framework.
Industry observers say the move sets an important precedent, demonstrating that proceeds recovered from economic offences can be redirected to those directly affected, rather than remaining locked in prolonged litigation.
While the payout does not resolve outstanding claims by banks and lenders, former employees described the decision as long-overdue recognition of their hardships. Several employee unions had consistently petitioned authorities, citing unpaid wages, provident fund contributions, and gratuity dues.
Kingfisher Airlines, once positioned as a premium full-service carrier, suspended flights in October 2012 amid mounting debt, grounding issues, and regulatory action. Its collapse became one of India’s most high-profile corporate failures, with employee dues remaining unresolved for years.
The ED said the restitution process will be carried out through court-approved mechanisms to ensure transparent and proportionate distribution among eligible beneficiaries.
