Delhi International Airport (DIAL) has asked Air India, via the ministry of civil aviation (MOCA), to vacate the Centaur hotel located near the airport so that it can build a fourth runway. The national carrier, according to senior executives, is reluctant to let go off the hotel since it would mean taking a hit of Rs 300 – Rs 350 crore. Consequently, it has asked for a compensation of an equivalent amount. DIAL—a joint venture between GMR Airports and Airports Authority of India—has not decided on how to offer a compensation.
An executive from Air India said taking a hit of R300-R350 crore at a time when the carrier is being revived will be difficult. “Moreover, several people will lose their daily livelihood. We expect some compensation from Dial or land in an equivalent place,” the executive said.
In a letter written in November, DIAL said it would give Air India twelve months – till November 2017 – to vacate the premises so that the building can be demolished.
In 1971 Air India built Centaur Hotel after setting up the Hotel Corporation of India. The hotel has, however, lost some business to new five star hotels in the vicinity especially to the newly- constructed Aero City.
The Centaur hotel has been set up over 45,000 square meters of land and has 3,085 saleable rooms. AAI was recently asked to renovate 100 rooms of the hotel and the work is expected to end in March. The lease of the land is currently up to 2032.
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Air India has already invested Rs 110 crore in the hotel. In addition, the hotel has been loaned Rs 170 crore.
The hotel has 500 employees in Delhi and Air India’s internal calculations suggest it may need to set aside R150 crore – R160 crore for a voluntary retirement scheme since existing employees cannot be absorbed in any other arm of the national carrier.
The employees union, however, wants the employees to be absorbed in Air India and have already voiced their concern to some of the officials in MOCA.
According to a spokesperson of DIAL, in view of the airport development requirement, AAI had issued the Termination Notice on 08.11.2016 to Centaur Hotel and advised them to vacate and handover the land to AAI within the notice period. DIAL is abiding by the terms and conditions laid down in the OMDA and Lease Deed executed with AAI.
The Centaur hotel and its branches in Mumbai and Srinagar were once used by the crew members of Air India. “We were planning to revive the flight catering unit in the hotel to increase the revenues,” said another official of Air India.
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