Installment scheme sought by airlines to clear airport dues

Installment scheme sought by airlines to clear airport duesIn the times of financial meltdown and rising oil prices, the aviation industry had to suffer a lot. Since it seems that the industry is finding it hard to pay dues to the airports, it has called for government intervention to pay it in installments, in the same manner as they have been allowed to pay for the fuel. 

The lead has been taken by the Kingfisher Airlines chairman Vijay Mallya, who took the initiative to write to the Airport Authority of India (AAI) to permit them to pay the dues estimated at Rs 1,000 crore, in installments. This step has been taken by the airlines after AAI finalized 24th October as the deadline for Kingfisher to clear dues. A warning was also issued by AAI that in case Kingfisher fails to clear the dues, then the credit facility would be withdrawn. 

A 'relief package' was created by the petroleum ministry for airlines last week, in order to let them pay their dues in monthly installments and also extended the credit period to 90 days. 

"Aviation turbine fuel (ATF) prices would be revised every fortnight, instead of every month," said Petroleum minister Murli Deora, following a high-power meeting with civil aviation minister Praful Patel, oil companies and airline industry representatives. 

According to the spokesperson from Kingfisher Airlines, "The Federation of Indian Airlines (FIA) has requested similar payment terms from the AAI. It has also urged the state-owned airport operator to reduce landing and parking charges." 

The chairman of FIA is Mr Mallya. The spokesperson also said, "We have already made an on-account payment to the AAI." However, he didn't specify the amount. 

During the year of 2008-09, the airline industry might have to suffer losses to the extent of $1.5 billion. 

Business News: