Pvt airport operators plan to snap credit line to Air India

Written by Nirbhay Kumar | New Delhi | Updated: Sep 30 2011, 07:18am hrs
The countrys five private airport operators, which control over 60% air traffic, are planning to put state-owned Air India on cash-and-carry for not clearing dues totalling R556 crore. Under cash-and-carry, the airline can fly from the airport only after making upfront payment for using the facilities.

Cash-strapped Air India owes R243 crore and R218 crore to Delhi International Airport (DIAL) and Mumbai International Airport (MIAL) respectively as on July 2011.

If Air India continues to default on payment of outstanding we would be left with no option but to allow the airline to operate only after receiving prior payment, said an executive of a private airport.

The airport companies under the banner of Association of Private Airport Operators (APAO) has also written to civil aviation minister Vayalar Ravi for an early clearance of dues by the airline. The APAO has communicated to the ministry that the financial viability of the airport firms would be adversely affected if dues remain unpaid.

In case of delay in payment of dues the cost of equity would go up. Eventually it will hurt private investors in the sector, said a DIAL official wishing not to be named.

The airline has an accumulated loss of over R20,000 crore and a total debt of over R60,000 crore of which R21,000 crore is the working capital loan. It has asked the government to provide R6,600 crore to pare part of its debt and clear vendor payments.

The government has already infused R3,200 crore in the airline as equity since February 2010.