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Air India put on cash-and-carry mode by Mumbai Airport

LiveMint logoLiveMint 22-05-2014 PTI

Mumbai/New Delhi: Air India has been put on cash-and-carry mode by Mumbai Airport authorities after its dues mounted to Rs450 crore even as the airline on Thursday said it has paid about Rs40 crore and certain outstandings were yet to be reconciled.

The GVK-led Mumbai International Airport Limited (MIAL), which runs the city airport, on Wednesday communicated its decision to the Air India management, MIAL sources said, adding that the airline has been “put on cash-and-carry mode as it has failed to clear the dues in the required time”.

The dues relate to various airport charges like those for landing, navigation, parking and other services, which an airline has to pay to the airport operator.

The national carrier, the sources said, has been told to pay at least Rs200 crore by June if it wanted to be taken off from the cash-and-carry mode. “As of now their cumulative dues stand at Rs450 crore,” they said.

Discounting this, senior Air India officials told PTI that the airline had paid Rs650 crore to GMR-led Delhi International Airport Limited (DIAL) and over Rs100 crore to MIAL in 2013-14 to clear its backlog. On top of this, about Rs40 crore was paid to MIAL only on Wednesday, they said, adding that dues to MIAL and DIAL are “yet to be reconciled since they have charged us interest on certain outstanding heads, which is not acceptable to Air India.”

Air India’s flight operations out of Mumbai would not be affected, the officials said.

Observing that payment of old outstandings were linked to equity infusion by the government, they said escrow accounts for both DIAL and MIAL have been created to pay dues relating to user development fee, development fee and passenger service fee which were collected and remitted on a monthly basis.

In addition, payments were also being made for parking space and landing, parking charges every month, the airline officials said.

They said MIAL also owed Air India “sums of money” on account of hangars and some facilities which have not yet been constructed or their construction completed and added that these amounts would be set off against the dues owed to MIAL.

MIAL’s move comes at a time when the national carrier is in the process of joining Star Alliance.

When contacted, a DIAL spokesperson said, “DIAL has not initiated any such action against Air India as of now.”

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