A month back, civil aviation minister Praful Patel worked his charm on oil marketing companies to wrangle several concessions for ailing airlines
NEW DELHI: A month back, civil aviation minister Praful Patel worked his charm on oil marketing companies to wrangle several concessions for ailing airlines, including the flexibility of repaying fuel dues in equated monthly instalments (EMIs).
It seems, however, that Patel has not been able to persuade the Airports Authority of India (AAI), a body very much under his command, to follow suit. According to sources, there is still no concrete proposal with the ministry, which would suggest that AAI allow airlines to clear their airport dues in a staggered manner.
Besides, the ministry has also not agreed to airlines’ demands of reducing airport charges — which include landing and parking fees, navigation and other charges — to help them tide over the present financial crisis.
These sources indicated that the matter of AAI dues - which amount to well over Rs 2,500 crore - is getting trickier by the day since they continue to pile up and no mechanism has been evolved to address the issue.
This situation prevails even as Kingfisher chief Vijay Mallya is scheduled to meet top AAI officials on Monday to urge for some relief in the quantum of dues as well as the mode of their repayment. Mallya’s airline owes the largest amount among all private carriers.
The government’s refusal to see reason on a recent AAI policy, which resulted in airports such as Amritsar and Jaipur paying higher charges than bigger counterparts like Delhi and Mumbai, has made the issue more complex. This policy is applicable to all airports which have recently been given ‘international’ airport status and could well result in many carriers withdrawing flights from such airports. Already, at least two international carriers have withdrawn flights from Amritsar.
Though withdrawal of flights from any destination is not only because of high airport charges, they do play an important role in airlines’ bottomlines.
According to latest available data, Nacil owed Rs 653 crore till October 30, Kingfisher-Deccan combine Rs 255 crore, Jet Airways Rs 37 crore, SpiceJet Rs 21.4 crore and Paramount Airways Rs 10.6 crore.
b_sindhu@dnaindia.net
Aviation panel meet on Tuesday
The high-level panel appointed to look into the financial troubles of aviation sector is expected to hold its second meeting on Tuesday. While the urgency for a solution has receded, the civil aviation ministry is nevertheless expected to push for more sops for airlines.
According to sources, topping the demand list is classification of Aviation Turbine Fuel (ATF) as a ‘declared good’, which would bring the sales tax levy down from an average 25% to just 4% across all states.
Carriers’ mounting airport dues and opposition to the new ground handling policy (which is scheduled to come into effect from January 1) are also likely to figure in the meeting.
ATF prices are down 35% to Rs 46.52 a litre from a high of Rs 71.76 a litre in June (prices at Mumbai) and may fall further this week on weak global cues. But the ministry is unlikely to leave out any demand in its bid to save the aviation sector from plunging into further losses.
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