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SpiceJet has got a breather, with the Airports Authority of India approving the airline’s proposal to bring down its dues in two phases.
The Ajay Singh-led airline had proposed to maintain its principal amount dues below 75 per cent of the bank guarantees by March 31. The airline had also agreed to clear the entire interest debt component or increase the bank guarantees before the deadline.
Also read: SpiceJet proposes two-fold plan to clear dues to AAI
In a board meeting on Tuesday, the plan was discussed and was approved, said an AAI official requesting anonymity. However, the plan will have to be shared with the Delhi High Court because SpiceJet had moved the court seeking a stay on AAI from encashing its bank guarantees last year.
As per AAI’s credit policy, it can encash the bank guarantees if the total dues of an airline are above 75 per cent of the bank guarantees. BusinessLine had reported that the no-frills carrier owed approximately ₹147 crore as principal amount and ₹78 crore as interest. AAI has a bank guarantee of only approximately ₹155 crore. Since the company did not clear its dues, it was put on cash-and-carry mode for a daily fee of ₹1.1 crore and submitted a payment plan since June last year.
Another official said that “this may be the last time that SpiceJet gets a leeway. It has to bring down its dues below the 75 per cent threshold of the bank guarantees. AAI too is answerable. Its losses cannot keep mounting just because it is a government entity.”
Where on one hand Indian airlines have been struggling, on the other hand, the AAI too has seen a drastic fall in aircraft movement. This had had a direct impact on its revenues, too.
According to the data available on the AAI website, as of November 2020, the international aircraft movements and Domestic aircraft movements have witnessed a decrease of 75.3 per cent and 65.6 per cent, respectively, resulting in 67.2 per cent decrease in total aircraft movements during (April- November) 2021-21 as compared to (April-November) 2019-20.
The international passenger traffic and domestic passengers have decreased by 90.7 per cent and 75.8 per cent, respectively, resulting into an overall decrease of 78.8 per cent in total passenger traffic during the period (April- November) 2020-21 as compared to (April – November) 2019-20.
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