GMR says it may put Kingfisher on cash & carry

After state-run Airports Authority of India (AAI), its private partner at Delhi and Hyderabad airports, the GMR group, plans to initiate action against Vijay Mallya-owned Kingfisher Airlines for defaulting on payments at the two airports.

A senior GMR official, who did not wish to be named, told DNA his company plans to put the defaulting airline on a cash-&-carry mode in the next two days.

AAI has already put the defaulting airline on cash-cash-carry mode as its dues reportedly exceeded its bank guarantee of Rs 100 crore by Rs 53 crore.

Once an airline is shifted to cash-and-carry mode, it stops enjoying credit facility and has to pay as and when bills are presented.

“There is a small bank guarantee of Rs 4-5 crore, but that is not enough. We are not able to pay our service providers because airlines like Kingfisher are not paying fees on time. So, we have decided to follow our partner (AAI) and will put it (Kingfisher) on cash-and-carry mode to recover our dues,” the GMR official said.

The official said Kingfisher’s total outstanding to the private airport operator amounted to Rs 40 crore, including Rs 30 crore to Delhi International Airports and Rs 10 crore to Hyderabad International Airport.

Bangalore-based GMR operates the two airports along with AAI.

As per the arrangement going, it collects only landing and parking fees from airlines, based on the weight of the aircraft, while navigation charges go to the public sector company.

“We bill the airlines a fortnight after the landing and parking. We give them another 15 days to pay up the dues. As a goodwill measure, we are foregoing the 18% penal interest because they (airlines) are going through difficult times,” the GMR official said.

He said dues of all the other airlines —- Jet Airways, Air India, IndiGo, SpiceJet, Paramount Airways and GoAir —- were current, which meant they had not exceeded the credit period of 15 days.

“We have given them incentive in the form of 15% rebate on charges if they pay their dues within the credit period. Many of the airlines pay on time to avail of this discount,” he said.

Earlier, oil marketer Indian Oil Corporation was also forced to put Kingfisher on cash-and-carry mode because of mounting dues.