From Dec 3, major airport operators across the country will put Kingfisher Airlines on cash-and-carry basis if it fails to clear its dues and levy interest of R30 lakh per day for operations
From Dec 3, major airport operators across the country will put Kingfisher Airlines on cash-and-carry basis if it fails to clear its dues and levy interest of R30 lakh per day for operations
Fast dwindling credentials of the reportedly loss-making Kingfisher Airlines (KFA) suffered yet another setback. Yesterday, Mumbai airport, a consortium of GVK infrastructure shot off a letter to the airline, asking it to clear their dues by tomorrow, failing which the airline would be put on cash-and-carry basis along with a hefty interest on the pending dues.
To make matters worse, the other airport governing bodies, including GMR and Airport Authority of India (AAI) are most likely to follow suit, said sources.
"The outstanding balance which the airline has to pay to GVK for Mumbai airport has crossed Rs 90 crore mark and in the last six months, the airline hasn't made a single payment. In the letter written to Kingfisher, GVK has set December 3 as the deadline for clearing its dues. However, if Kingfisher fails to meet the deadline, it would be put on cash-and-carry basis (pay and operate) that would be nearly Rs 30 lakh per day. Moreover, the airline will also have to pay another Rs 30 lakh as interest on the pending dues, to conduct its operations," said a source.
While the above-mentioned figures are exclusively for Mumbai airport, Kingfisher owes nearly Rs 30 to 40 crore to Bangalore airport, yet another GVK syndicate. Sources further revealed that the country's biggest airport operators AAI and GMR are contemplating on putting the airline on cash-n-carry basis too, as the airline owes huge sums to them as well. While the dues pending with AAI are about Rs 240 crore, the figure with GMR infrastructure that operates Delhi and Hyderabad airports is close to Rs 100 crore.
Poor record
Other than owing money to different airports, the airline's past record with oil companies has been dismal, claimed sources. Due to non-payment of dues worth Rs 650 crore and Rs 250 crore with Hindustan Petroleum and Bharat Petroleum (BP) respectively, time and again, these firms have terminated their services to KFA. To compound the airline's woes, Indian Oil Corporation too has put the airline on a cash-and-carry basis, while the issue with BP is in court.
MiD DAY in its report ('Airports, oil cos to turn the heat on Kingfisher', Nov 12) had published the ongoing crisis faced by the airline.
Descending fortunes
According to reports, the loss-making KFA has not made profits since its inception in 2005. As of March 31, 2011, the airline is running into a debt of Rs 7,057 crore and has reported a loss of Rs 1,027 crore for the year 2010-11.
Kingfisher says
"As a matter of policy, we do not comment on supplier and partner relationships. 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," said Prakash Mirpuri, vice president, corporate communications, Kingfisher Airlines Limited.
Rs 1,027 cr
Loss suffered by the airline for the year 2010-11
Rs 7,057 cr
Loss incurred by the airline since its inception in 2005
Pilots quit
Citing non-payment of salary as the primary reason, it has been reported that over 100 pilots have quit the airline in the last two to three months. The pilots are quitting at a time when the Indian aviation industry is growing at a fast rate and is thereby running short of pilots. Sources also revealed that most of the pilots are joining a private low-costairline, which has recently emerged as one of the biggest aviation players in the country.
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