Govt intervention allows AI, Kingfisher to get off the hook
31 May 2011
New Delhi: Senior officials of the GMR group, operator of two international airports at Delhi and Hyderabad have confirmed that government intervention has led to an understanding which will allow state-owned carrier Air India to submit a plan to clear accumulated arrears and escape being out under the ''cash-and-carry'' regime as threatened by the airport operator. Along with AI, defaulting carrier Kingfisher Airlines too has been asked to submit a plan clarifying how it will clear its dues.
GMR group officials said ''reconciliation meetings'' with the two defaulting airlines had been scheduled.
With respect to Air India, the government stepped in on Monday to hammer out an agreement between the two GMR-led consortia and Air India. In tandem, the government is also trying to expedite payment of arrears, amounting to Rs1,100 crores, to Air India incurred after the government failed to clear dues related to VVIP travel and special flights organised by the airline to North Africa in recent months to transport Indians back home.
If the meetings work out well both these defaulting airlines may not be put on a ''cash and carry'' mode of payment at Delhi and Hyderabad international airports from 1 June as threatened earlier by the airport operator.
Last week, the two GMR-led consortia - managing Delhi and Hyderabad airports - had announced that both Air India and private airline Kingfisher Airlines would be allowed to operate flights to and from Delhi and Hyderabad from June 1 only on a ''cash and carry'' basis. The operator said it had to recover ''significant'' dues from these airlines.
Under a ''cash and carry'' regime AI and Kingfisher would have had to make daily payments to the Delhi and Hyderabad airport operators, or risk having their flights cancelled from 1 June.
Following government intervention it appears unlikely that the threat will be carried out.
