Mumbai International Airport (MIAL), owned jointly by the GVK group and the Indian government, said on Thursday the debt-ridden Kingfisher Airlines will have to pay them every day to fly their planes from the Mumbai airport, technically known as ?cash-and-carry?, as the carrier failed to repay six months? dues of R90 crore. This means the airline will have to pay R60 lakh every day from Saturday to take off its 17 domestic and 3 international flights.
Officials in MIAL said that ?the airline will be put on ?cash-and-carry? mode from December 3?. Kingfisher is the first to be put on this list.
The move will stifle India?s third largest carrier by passenger as it has sought help from banks for working capital loans to run its daily operations and government permission to import aviation fuel directly from overseas oil companies. In September, the airline chairman Vijay Mallya, who also runs liquor maker United Spirits, said it would shut down its low cost airline Kingfisher Red and had been cancelling anywhere between 30 to 40 flights every day since the first week of November.
The airline, which did not report a profit since its start in 2005, made losses of R732 crore in the fiscal half ended September 2011 and is saddled with R7,000 crore debt, which has to be repaid from 2013.
The airline, however, said its flights will not be affected. ?As a matter of policy we do not comment on supplier and partner relationships,? a Kingfisher spokesperson said. ?However, we would like to reassure all our guests that all our flights will continue to operate as normal as per the revised schedule published on our website.?
?Kingfisher Airlines has faced such threats of being put on cash-and-carry mode in the past and gotten away with it by showing bank guarantees,? a consultant with a global consulting and audit firm said.
He cannot be quoted as his firm?s media policy do not allow them to comment on individual companies. ?This time, though, things are not the same, the banks aren?t fully behind the airline. Vijay Mallya would have to bring a rabbit out of the hat to get out of this problem,? he added.
In April, Kingfisher failed to repay R100 crore to two GMR-owned airports, Delhi International Airport and GMR Hyderabad International Airport. However, it was not put on ?cash-and-carry? mode then, after a last minute patch up plan agreed by airline to adhere to a ?structured payment plan? to clear the dues.
Agencies also reported on Wednesday that Airports Authority of India (AAI), which operates 125 airports across the country, plans to put Kingfisher Airlines on ?cash-and-carry? mode from this week on all airports operated by AAI as the airline owes R240 crore to the AAI. Vijay Mallya met India?s airport regulator Airport Authority of India chief VP Agrawal on Tuesday. The details of the meeting are not yet known.
(With inputs from agencies)