Kingfisher Airlines is defaulting on depositing passenger service and airport development fees towards the Mumbai International Airport Ltd (MIAL) in the designated escrow account. The Vijay Mallya-owned airlines, which is facing an acute fund crunch, had accumulated dues to the tune of Rs 50 crore recently, it is learnt, following which MIAL started charging it on a cash-and-carry basis. This was removed only when the airline cleared about Rs 20-crore dues.
It could not be ascertained whether Kingfisher owes similar dues to other airport developers. All airlines collect fees from embarking passengers ? Rs 229 towards passenger service fee from all embarking passengers and another Rs 100 from domestic and Rs 600 from international passenger ? towards airport development fee. The amount is deposited in an escrow account managed by the airport developer.
?It?s almost alarming that you have stopped making payment not only of airport charges but you are also withholding payments of development fee and passenger service fee (PSF) collected by you on behalf of CSIA (Chhatrapati Shivaji International Airport) and government of India,? MIAL president RK Jain wrote to Kingfisher Airlines in a letter dated August 4.
Responding to an emailed query from FE, a Kingfisher airlines spokesperson said, ?We do not comment on supplier/partner relationships and such other commercial matters publicly.?
In the past, Kingfisher Airlines had defaulted on payment to the Airports Authority of India (AAI) and Hindustan Petroleum Corporation Ltd (HPCL). While the airline reached a settlement with the oil marketing company to clear dues worth Rs 814.49 crore, about Rs 206.77-crore dues to the AAI still remains unpaid. ?AAI has raised funds from banks for undertaking airport development works and it is paying interest on that. It cannot afford to leave the dues from airlines pending,? a civil aviation ministry official said.
As reported earlier, Kingfisher Airlines has approached banks to restructure its debt amounting nearly Rs 6,000 crore. It has sought to lower the interest rate and moratorium on loan repayments.
The airlines has mandated SBI Caps, the investment banking arm of SBI, to restructure its finances and is also planning to raise $200 million via global depository receipts (GDR) issue.
The debt restructuring issue is currently under consideration of the RBI, which is looking into loan restructuring of the aviation sector as the industry is going through a bad patch.
The civil aviation ministry is also pushing for a debt recast package of the airline companies. Kingfisher Airlines posted a Rs 187-crore loss in the April-June quarter against a loss of Rs 237 crore during the same period in the previous year. Kingfisher has a market share of about 21% in the domestic market and operates a fleet of 67 aircraft, of which nine are grounded due to technical problems.
