Logistics

AAI puts Air India on cash-and-carry mode at four airports

Rajesh Kurup Forum Gandhi Mumbai | Updated on July 06, 2020 Published on July 06, 2020

The carrier cites stressed financial condition due to Covid-19, seeks more time to pay the dues

The Airports Authority of India (AAI) has put Air India, the country’s flag carrier, on a cash-and-carry mode, effective Tuesday, at four airports in the country due to accumulation of dues over a long period. The airline, on its part, has sought an extension from the authority stating that the move would be an additional strain on it.

Meanwhile, Air India has made a payment of ₹2 crore as an initial settlement towards the dues for the Ahmedabad, Bhubaneswar, Chennai and Kolkata airports. However, it isn't clear how much the carrier has paid the airport authority earlier, but the overall dues are said to be at ₹2,500 crore.

Under the cash-and-carry mode, the airline can use the facilities of an airport only upon making payments in advance.

The order is effective from July 7, , sources close to the development told BusinessLine.

The authority has also asked all concerned officials and its directorates to take necessary action for its implementation, one of the source said.

Pointing to its stressed financial conditions due Covid-19, Air India has asked AAI to reconsider its decision and provide some more time for payment of dues “till the situation normalises”.

Senior AAI officials told this newspaper that Air India owes about ₹2,500 crore to the authority.

“Since the carrier is a State-run firm, we were delaying this decision for some time as there were promises to make payments soon. However, the payment is yet to be made,” an AAI source said.

As of March 2019, the accumulated debt of Air India stood at about ₹60,000 crore. While the government is in the process of privatising Air India, the last date to submit Expression of Interest (EoI) has been extended till August 31.

The industry body, CAPA, in its report, said in the short term alone, Air India could conservatively require financial assistance of over $1.5 billion to survive.

The Covid-19 pandemic has further crippled the aviation industry, which was struggling to stay afloat due to the economic slowdown and regulatory issues.

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Published on July 06, 2020
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