AAI tells Air India to pay first and then fly

The Airports Authority of India (AAI) has asked Air India to fly only on cashand-carry mode in four airports for now, which includes Ahmedabad, Bhubaneswar, Chennai and Kolkata airports due to nonpayment of dues for a long period. This means that now Air India will have to make the payment on a daily or per flight basis for parking and landing purposes at these airports.

The AAI in a circular said, “The competent authority has approved to put the operations of Air India on cash-and-carry basis w.e.f. 7 July.”

Air India refused to comment on these developments, but earlier, the national carrier had written to the AAI as a reply to their decision. The letter talked about their stressed financial condition due to the coronavirus outbreak.

“Government has already released Preliminary Information Memorandum for disinvestment of Air India and the date for submitting Expression of Interest is now extended to 31 August. The government has already mentioned that a substantial portion of Air India debts and excess of current liabilities over current assets would be transferred to Air India Assets Holding Ltd. Thus, it is likely that a substantial portion of debts of Air India would be transferred,” read the letter.

This letter requested AAI to reconsider their decision, “At this stage, cash-and-carry would bring additional financial stress on Air India liquidity. You are requested to reconsider the above decision and give some more time for the release of dues until the situation normalises for our flight operations. Air India has made a payment of Rs 2 crore on 2 July, you are requested to settle dues for Ahmedabad, Bhubaneswar, Chennai and Kolkata, against the above payment.”