As of Wednesday, Kingfisher Airlines Ltd. and Air India Ltd. will be allowed to fly in and out of Delhi and Hyderabad only if they first pay airport charges for each individual flight, said the GMR Group, which has a controlling stake in both Delhi International Airport Ltd. and GMR Hyderabad International Airport Ltd.
This is because Air India and Kingfisher haven’t paid their airport fees since October and December, respectively, GMR said.
“The managements of both these airports have had to take this decision after continued deliberations with these airline companies failed to yield payments of outstanding dues from these airlines,” GMR said in a press statement released late Friday.
GMR said on Friday that Air India owes 2.17 billion rupees ($48 million) to New Delhi’s Indira Gandhi International Airport and 358.9 million rupees ($8 million) to Hyderabad’s Rajiv Gandhi International Airport.
Kingfisher owes 679.8 million rupees ($15 million) to Delhi’s airport and 219.8 million rupees ($5 million) to Hyderabad’s airport, GMR said.
While they don’t have to pay their total outstanding fees by Wednesday, the two airlines have been asked to pay the charges for each flight in advance.
This measure, which GMR describes as “cash and carry” is only implemented “when the dues reach alarming proportions.”
The notice to Air India is just the latest in a long list of woes for the debt-ridden state carrier, which is also struggling with rising fuel prices and pilot discontent.
The airline announced Monday it will cancel 12 flights a day until June 15 because it is unable to pay for its fuel supplies, Dow Jones Newswires reported. Oil companies had asked Air India to pay for fuel on a cash-and-carry basis from December. Air India told Dow Jones that the company is unable to pay for more than 160 million rupees for fuel per day. The company, which has been posting losses since 2007, has a debt of around 400 billion rupees ($8.9 billion).
Last month the airline also had to cancel flights and suffer heavy losses due to a 10-day pilot strike that cost the company an estimated $2.7 million a day, according to the Associated Press.
Spokesmen at Air India did not immediately respond to requests for comment.
The notice probably comes as more of a surprise for Kingfisher, which is part of liquor magnate Vijay Mallya’s UB Group. Last week the airline announced it had narrowed losses for the financial year that ended March 31 from the previous year. It also said it expected to post its first-ever net profit in the ongoing financial year that began April 1.
A spokesman at the company declined to comment, explaining that “as a matter of policy we do not comment on or discuss supplier and partner relationships in the public domain.” A source at Kingfisher said the notice would not affect travel for passengers.
GMR said Kingfisher had previously been given a similar notice and had paid off the outstanding amount before the cash-and carry-measure came into effect.
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