Airlines go easy on parking and landing dues

Written by Shaheen Mansuri | Mumbai, Sep 8 | Updated: Sep 10 2008, 06:02am hrs
Airline companies have failed to pay parking and landing fees to the Airport Authority of India (AAI) on time, on account of fuel costs making a neat hole in their bottomline. Phillip Cash, airport director at CSIA (Chhatrapati Shivaji International Airport) in Mumbai told FE, Airlines pay their dues in cycles. Some are late in paying up though.

According to sources in AAI, the annual parking and landing fees at CSIA alone amounts to Rs 4,000 crore from all airlines. Almost 20% of this for the financial year 2007-08 is still pending. According to back-of-the-envelope calculations, average landing charge in Mumbai is Rs 12,300 for domestic flights and Rs 56,000 for international flights.

Air India pays Rs 1,800 crore annually towards landing and parking fees and has an overdue amount of Rs 500 crore, said sources at AAI.

However, Jitendra Bharghav, director (PR), Air India said, Our volume of business is large. We have always paid our dues to AAI on time and do not have any outstanding payments.

Private carriers like Jet Airways and Kingfisher Airlines pay approximately Rs 1,000 crore each annually as landing and parking charges. The remaining is paid by low cost carriers like SpiceJet, Indigo and GoAir. An official from Jet Airways told FE, We always pay our dues on time. There are different kinds of charges which are paid in installments by us to the AAI.

A Kingfisher Airline spokesperson said that the airline was in compliance with settlement terms as are negotiated from time to time with AAI. The position with regard to outstanding payment has to be viewed keeping in mind that AAI is already in possession of enforceable bank guarantees to the extent of 100% of the mutually agreed credit limit.

It may be noted that all airlines have a credit limit of 50% against a bank guarantee. The spokesperson added that from time to time whenever the outstanding exceeds 50% of the covered credit; it is a normal practice to ask airlines to pay up the difference.