India?s national carrier Air India may be asked to operate on a ?cash-and-carry? basis out of the Mumbai and Delhi airports till it clears its pending dues to GVK’s Mumbai International Airport (MIAL), and GMR’s Delhi International Airport (DIAL).

According to people familiar with the development, Air India owes around R450 crore to MIAL and another R500-600 crore to DIAL, run by the GMR Group.

FE spoke to four people familiar with the development; none wanted to be identified. Two of them confirmed that MIAL may ask Air India to operate on a cash-and-carry basis (which means Air India will have to pay its dues on spot each time it lands or departs from the Mumbai airport) by the beginning of June, if the carrier doesn?t settle at least a part of its outstanding dues by then.

?MIAL could act against Air India by forcing it to operate on a cash-and-carry mode if it fails to pay at least R250 crore of the R450 crore dues by June 1,? one of the persons said.

Another source added that MIAL and DIAL wrote to the ministry of civil aviation (MoCA) on May 16, bringing to its notice Air India?s payment default. The ministry is yet to respond to the letter, since the government is in a period of transition.

?Air India is a consistent defaulter. This is a huge problem for the operators,? one of the persons said.

Air India, however, denies the possibility of it being asked to operate on a cash-and-carry basis and contends that in fact MIAL also owes the airline some money, according to one of its senior officials who also spoke on the condition of anonymity.

This executive said the carrier had been paying its dues regularly to MIAL and DIAL through an escrow account. He also stated that both MIAL and DIAL owed Air India at least R250 crore on account of the airport operators? failure to construct and deliver certain infrastructure-related commitments like hangars for Air India?s aircrafts.

?Apart from paying the user development fee and other airport-related charges, we have been paying them R10-15 crore every month for usage of landing and parking facilities and space,? the senior Air India official told FE. ?We have paid DIAL R650 crore for fiscal 2014, and R100 crore to MIAL in calendar year 2014 till date, towards the settlement of past dues.?

Air India hopes to sort out the dispute by holding talks with the airport operators, a spokesman for the airline said. ?There are some charges which are under dispute, especially ones relating to hangars, that are being clarified,? he confirmed. ?We are waiting to receive some sort of payment from GMR and GVK. Once that is done, the remaining amount that the airline owes to the operators can be offset.?

Air India isn?t the only airline in recent times that has had trouble paying dues to airport operators. Others like Kingfisher Airlines, Jet Airways (India) and SpiceJet have in the past defaulted on payment obligations to airport operators as well.

While the Vijay Mallya-led Kingfisher Airlines was served an eviction notice by MIAL in 2013 for failing to pay R22 crore by way of airport charges, Naresh Goyal-led Jet Airways defaulted on payment of over R100 crore to Airports Authority of India (AAI) in 2013.

Jet had then requested the civil aviation ministry and AAI to extend the deadline payment. Low-cost carrier SpiceJet had also been put on cash-and- carry mode by AAI-operated airports in 2013 for a brief period, after its dues surpassed the limit of its bank guarantee.