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Mr Vijay Mallya

Our Bureau

Bangalore, Nov. 14 As domestic airline companies campaign to get Airports Authority of India to reduce its charges, the Chairman of Kingfisher Airlines, Mr Vijay Mallya, is set to meet the top honchos of AAI on Monday to ask them to stagger the dues his airline owes them.

A company official told Business Line that Mr Mallya and the Chairman of AAI, Mr M. Ramalingam, are expected to take a decision on Monday on how the airline can pay the dues and one of the options being considered is staggered payment schedule. Mr Mallya had earlier asked the AAI to allow the airline to pay back the dues in instalments and wanted the Centre to intervene to resolve the issue.

But sources in the Federation of Indian Airlines, a body formed by all domestic airlines, said that the bigger issue was the charges levied by the AAI. “If it wants that its customers should remain healthy and continue to use its facilities, it must take a re-look at its tariff model,” sources said.

In a recent presentation made to the investors, Kingfisher Airlines had said that it is leading the industry in trying to get the Airports Authority of India to reduce landing charges by as much as 50 per cent. It has also pointed out that International Air Transport Association wants the setting up of an airport economic regulatory authority to achieve cost-efficient infrastructure and align charges to global standards. “Kingfisher Airlines is leading the industry towards a structure where vendors to airline companies make only a reasonable return,” the presentation said.

The presentation pointed out that the profit before tax of Airports Authority of India was among the highest in the world.

For example, AAI’s PBT was 40 per cent (nearly Rs 400 crore per year) compared with Schipol’s 24 per cent and British Airports Authority’s 25 per cent. In the case of landing and take-off charges, the rate per flight for an A340 levied by AAI was $2,582, while Changi charges about $1,678 and Heathrow charges $2,471. The landing charges levied by Singapore for an A330 was $1,134, in Hong Kong it was $1,025 and in Mumbai it was $1,511, the presentation said.

Meanwhile, Kingfisher Airlines has said that it has sought a similar rescue package it received from the Petroleum Ministry for payment of dues, which is claimed to be over Rs 250 crore, from the AAI as well. The Petroleum Ministry had allowed all airline companies to pay the dues on a monthly basis and had also increased the credit limit to 90 days. The Petroleum Ministry will start revising aviation turbine prices every fortnight instead of doing it every month as part of a relief package to the beleaguered domestic airline.

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