In the Rajya Sabha today, the Minister for Civil Aviation, Shri Praful Patel informed the Parliament today that airport developers both in public and private sectors are not getting their dues from the airlines on time which is causing them financial problems.
As per the minister’s statement in the house
In respect of Airports Authority of India’s (AAI), the dues, in Rs. Crore (Rs. 5 Cr = $1 million) of defaulting airlines are :
NACIL-Air India – 739.50; Kingfisher Airlines / Kingfisher Red – 286.62; Jet Airways / Jetlite – 32.78; Spicejet – 15.76; Paramount Airways – 12.50; Interglobe Aviation – 6.00; Go Air – 8.81. Total dues are Rs. 1,101.87 Cr.
Mumbai International Airport’s dues are as follows: NACIL-Air India – 52.90; Kingfisher Airlines / Kingfisher Red – 14.11; Jet Airways / Jet Lite – 7.51; Go Airlines – 2.29; Air Indian Charters Ltd – 0.80; Lufthansa Airlines – 0.80; Malaysia Airlines – 0.63; Emirates – 0.61;
Indigo Airlines – 0.57; Spicejet Ltd – 0.55; Singapore Airlines – 0.42; British Airways – 0.30;
Kuwait Airways – 0.27; KLM Royal Dutch Airlines – 0.26; Airlines Allied Services – 0.25; Kenya Airways – 0.25; El-al Israel Airlines – 0.23; Qatar Airways – 0.21; Saudi Arabian Airlines – 0.20; Ethiopian Airlines – 0.20; Other airlines – 3.18. Total dues are Rs. 86.54 Cr.
The total dues of airlines as on date owed to Hyderabad International Airport Limited (HIAL) is Rs. 48.75 Cr.
The total dues of airlines as on 15.12.2008 on Delhi International Airport Limited (DIAL) is Rs. 84.50 Cr.
The total dues of airlines on Bangalore International Airport Limited (BIAL) is Rs.41 Cr.
Cochin International Airport Limited (CIAL) have also informed that there are some dues from airlines, but it appears no details are provided.
Government has given instructions to AAI to take all possible steps including legal action, if warranted against the defaulting airlines.
Just two airlines, Air India and Kingfisher owe 93% of total AAI dues, and 80.5% of MIAL dues. I suspect the trends at other airports will be similar.
Without political directive, it is career suicide for anybody at AAI, which is a government body, to even dream about, let alone execute, pursuing recovery operations against Air India, which is a government owned entity. In any case, Air India, just does not have the money. It is waiting for Sugar-Daddy a.k.a. Government of India to bail it out.
In case of Kingfisher, I am completely stupified. Dr. Mallya runs a global empire, he is astute and I am told, an extremely driven man. Aviation and Kingfisher, the airline, is his passion. What has gone wrong ? Have the liabilities of the Air Deccan merger finally caught up ?
Rs. 1,100+ Crores is not a trivial amount. This is money of the taxpayers of India, that should be put to better use, than left as overdues.
How seriously can we treat the minister’s statement about instructing AAI to use all possible means to recover their dues ? It will be a simple step for AAI. All they have to do is stop the airlines from landing at their airfields, and seize the aircraft already parked. It will probably take, all of 2 seconds, before holy hell will break loose.
All the airport operators are suffering due to the economic crisis, and the subsequent reduction in overall aviation activity, be it flights, passengers or cargo.
AAI revenue has decreased by Rs. 228 Cr., April to September 2008, as compared to the corresponding period in 2007. MIAL’s aeronautical revenue is down Rs. 79.83 Cr., April, 2008 to November, 2008. DIAL is down Rs. 50 Cr., and is already begging for financial assistance for its ambitious expansion plans, needed to meet the requirement of the Commonwealth Games 2010. HIAL has seen a total revenue decline by 15%. BIAL is down, but has not provided figures. The only other major airport operator, CIAL, has not been affected significantly, due to the constant middle east traffic, the one area of global aviation that is still escaping the global meltdown.
Overdues impose unneeded operational expenses on airport operators, and that ultimately comes back to passengers in the form of decreased services, delayed facilities, and higher fees. MIAL has been given permission for a 10% across the board rate hikes at Mumbai, Delhi can be expected to follow very soon.
Mr. Praful Patel is in difficult position of being the “boss” of both the defaulting airline and the airport operator owed the money. He has to make up his mind, and fast.