Mumbai International Airport Ltd (MIAL) and Air India are locked in a dispute over the payment of outstanding dues.

MIAL is planning to put Air India on a cash-and-carry mode, after its dues related to landing and parking at the city airport mounted to ₹450 crore. “We had requested Air India to make payment of ₹200 crore by June 1, failing which the carrier would be put on ‘cash-and-carry,’ a senior official in the know said, requesting anonymity.

Putting an airline on cash-and-carry basis means airport charges such as parking charges for its aircraft and landing charges have to be paid every time it takes off and lands. Failure to clear dues before each take off and landing could lead to disruption in operations as the airport can refuse the airline permission to conduct regular operations. The MIAL spokesperson did not comment on the development.

Air India officials counter that MIAL’s allegations come a day after Air India made a payment of ₹35-40 crore to it. They further said the airline recently created an escrow account for Delhi and Mumbai airports, where dues relating to User Development Fee, Development Fee and Passenger Service Fee are collected and remitted to the Mumbai airport on a monthly basis.

Air India said payments are also made for the space allotted to the airline at the Mumbai airport and that it also pays parking and landing charges to MIAL.

Interestingly, Air India officials also maintain that it is MIAL that actually owes money to the airline, for facilities and hangars which the airport operator was supposed to construct and give to the airline.

Air India officials point out that during fiscal 2013-14, the national carrier paid ₹650 crore to the Delhi airport, while more than ₹100 crore was paid to the Mumbai airport.

“The outstanding amount for which payments are being asked for is an old outstanding. The airline has already communicated to both the Delhi and Mumbai airports that the outstanding amount will be settled when more equity is made available by the Government,” a senior official said, while declining to give details on the amount of money involved.

Air India’s losses are estimated to widened to around ₹5,400 crore in FY 2014, as against the target of ₹3,989 crore, primarily due to high operational costs.

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