Air India delays DIAL dues

AAI had to bear cut from its 46% revenue share from the airport

Air India (AI) and Airports Authority of India (AAI) may be different government entities but when it came to the pending AI’s dues to Delhi International Airport Limited (DIAL), around Rs 250 crore was adjusted against the 46% revenue share of AAI from the airport. As Air India will be paying its pending dues to DIAL in a week or so, the airport operator is expected to pay the amount at an interest rate of 9.5%, confirmed a senior AAI official.

DIAL did not respond to the emailed queries till the press time.

However, according to an aviation expert, “DIAL was totally justified in holding back the share of revenue that they never received. It cannot be paying on behalf of defaulting airlines.”

Though Air India was also faltering on payments to Mumbai International Airport Limited (MIAL) yet it did not resort to withholding payments from AAI’s revenue share, the official added.

Of Rs 2,000 crore released by the finance ministry for Air India’s turnaround plan in the winter session of the parliament, AI will be clearing its dues first to all the private airport operators and PLIs (Productivity Linked Incentives) to the employees. Air India was expected to receive Rs 10,000 crore in 2012-13 but it received only Rs 6,000 crore.

“As AI will be receiving remaining Rs 4,000 crore in next budget session, we are planning to clear all its dues to oil companies till April. With this, AI will be free of all its dues to airport operators and oil companies,” said as senior Air India official.

Delhi airport is owned by a consortium. The GMR Group owns 50.1%, AAI owns 26%, Fraport AG and Malaysia Airport hold 10% each, and India Development Fund owns 3.9%. DIAL (run by GMR) is supposed to share 46% of total revenue with AAI.

Increasingly, the revenue share that AAI receives from DIAL and MIAL is contributing more to its capital expenditure. Of Rs 2095 crore capital expenditure of AAI in 2011-12, around 57% was collectively from DIAL and MIAL.

DIAL has created 11 JVs to operate various non-aeronautical businesses. Its share in the JVs range from 26 to 50% and the revenue share is 15 to 25%. The JVs are for duty-free shops, food stalls, advertising, parking, fuel supply, cargo and other services.