Kingfisher Airlines faces AAI heat over dues

Shishir Sinha Updated - March 12, 2018 at 11:59 AM.

Airports operator threatens to cash cheques if pending payments are delayed

BL25_P2_KINGFISHER

The Airports Authority of India (AAI) has threatened to cash cheques worth Rs 130 crore, deposited by Kingfisher Airlines, to partially settle the airline's dues to the public sector airports operator, sources told Business Line .

Interestingly, AAI is still unclear on how to go about collecting dues worth Rs 750 crore from the cash-strapped national carrier Air India.

Kingfisher Airlines has Rs 205 crore outstanding with the AAI, which collects navigation, parking and airport usage charges from carriers at all domestic airports, except Delhi, Mumbai, Hyderabad and Bangalore. Although these four airports are run by private entities, AAI is entitled to a part of their revenues.

Cash and carry mode

AAI has placed the private sector airline on what is known as a ‘cash and carry' mode from June 1 as payments are pending.

Generally, airport operators provide services to airlines on credit, with the carriers billed every fortnight rather than daily. However, if airlines fail to meet their financial liabilities, they are put on cash and carry, which means they will be permitted to fly only after they pay for all services in cash.

“Kingfisher deposited cheques amounting to Rs 130 crore, but without putting any dates (on them). In a recent board meeting, it was decided to ask the airline to fill the dates. Otherwise, AAI will fill in the dates itself and encash the cheques,” the sources said, even as they clarified that no specific date had been set for the follow-up.

Kingfisher, on the other hand, refused to divulge its next course of action. “As a matter of policy we do not comment on or discuss supplier and partner relationships in the public domain,” the airline spokesperson said.

At the board meeting, the option of grounding the aircraft of both airlines (Kingfisher as well as Air India) was considered, but rejected, sources said. “It will be a very harsh step and will cause inconvenience to the passengers. It will not be a commercially viable step,” the sources clarified.

Debt-laden Air India too is finding the going tough when it comes to paying for its day-to-day operations. Recovering AAI's dues from Air India is not going to be an easy task as the national carrier's dire financial situation is well-known, the sources said. “We hope the government will help in recovering dues,” they said.

> Shishir.s@thehindu.co.in

Published on July 24, 2011 18:06