AAI broadens deadline by 1 day to Kingfisher Airlines

Airports Authority of India (AAI) has given one more day to Kingfisher to clear its cash-and-carry dues of past one week even as civil aviation minister Ajit Singh on Wednesday ruled out closure of the crisis-ridden airline. “You can’t close down a company because they are making losses or banks are not giving them money. As long as passenger safety is not jeopardized, as long as they keep their schedule, why should we close down any industry ?” the minister told reporters, adding that the closure of an airline would impact passengers greatly.

Kingfisher Airline is now unable to pay the daily cash-and-carry amount to the Airports Authority of India (AAI) and has accumulated dues of Rs 5 crore in past week, government officials said. But, with the civil aviation ministry making clear that it won’t pull the plug on Kingfisher, AAI cannot take any action against the airline.

Kingfisher did not comment on the matter. AAI had put Kingfisher on cash-and-carry about two months back after it accumulated dues of Rs 250 crore and since then it was paying about Rs 80 lakh everyday to operate flights from AAI airports under the original winter schedule where it was operating about 240 flights a day. This daily payment fell to Rs 60-65 lakh after the airline cut flights recently, said an official.

Bank chiefs have been quoted as saying that Kingfisher would need to arrange fresh equity of Rs 1,000-2,000 crore before seeking additional funds from the consortium of banks, led by the State Bank of India.

A consortium of 18 banks, comprising 14 state-owned and four private banks, have provided huge sums to the cash- strapped airlines, which has a total debt of about Rs 7,057 crore and accumulated losses of about Rs 6,000 crore.

“For weeks, Kingfisher has been telling us that it is expecting money. But, those promises are proving hollow. Still, they have no reason to worry as the aviation ministry has publicly said no action would be taken against them and that they would only ensure safety of whatever aircraft Kingfisher flies through enhanced DGCA checks,” said aviation sources.

The airline has also informed DGCA that it would strive to bring in to service in the next week or 10 days 16 more planes in addition to the 28 it has promised to the regulator that it would operate. Of the 64 aircraft fleet, 28 are now operational.