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Mumbai International Airport Limited has warned Kingfisher that it will put it on a cash and carry basis if it does not clear its Rs 105.71 crore (Rs 1.05 billion) dues by May 25.
Cash and carry basis means the airline will not be allowed to operate flights out of Mumbai unless it pays for landing and parking for each movement on an immediate basis.
Kingfisher Airlines has already run into payment issues with oil companies and the Airports Authority of India and the latest warning from MIAL is an indicator of the airline's worrisome financial position.
Recently banks which lent money to the airline converted Rs 750 crore (Rs 7.5 billion) debt into equity as part of a restructuring plan.
MIAL wrote to the airline last week, demanding payments in four instalments (three instalments of Rs 25 crore or Rs 250 million each and balance Rs 30.71 crore or Rs 307.1 million) by May 25.
Till this evening, the airline had not paid the first instalment of Rs 25 crore (Rs 250 million), an airport official said.
According to MIAL, the airline had assured it would clear the dues by February.
Based on it MIAL did not take action against KF for a previous instance of cheque bouncing.
However, since the dues were not settled, MIAL sent the warning.
Of the Rs 105.71 crore (Rs 1.05 billion), about Rs 40 crore (Rs 400 million) is on account of passenger service fees and airport development fees the
The passenger service fee is shared by the government and the airport operator and utilised for security and maintenance purposes.
The airport development fee goes to the airport operator for construction and modernisation work.
The issue of Kingfisher deafulting on its payments was raised by MIAL with civil aviation ministry last year.
In a review meeting last June participated by representatives of DGCA, AAI and the ministry MIAL expressed concern over the dues.
Last June the dues amounted to Rs 60.6 crore (Rs 606 million).
The committee had observed the witholding of fees by Kingfisher was a serious issue as the money belonged to government and the airport operator.
A Kingfisher spokeperson said, "As a matter of policy we do not comment on or discuss supplier and partner relationships in the public domain.''
