Air India, which is staying afloat on taxpayers' money, owes around Rs 2,300 crore to the national airports operator. These dues are towards landing and parking charges as well as route navigation charges.
The national carrier was looking to convert around Rs 2,000 crore of the total dues into equity for AAI, the official added.
On earlier occasions also, the airports operator had rejected similar proposals from the government-owned airline.
AAI manages a total of 125 airports, including 11 international ones. It also provides Air Traffic Management Services (ATMS) over entire Indian airspace and adjoining oceanic areas.
Airlines have to pay certain fees for using the airport and for availing ATMS, among other services.
Air India has been making various efforts to revive its fortunes amid stiff competition. The carrier is surviving on a Rs 30,000 crore bailout package extended by the central government.
So far, the government has released just over Rs 24,700 crore as equity support to the airline.
Last week, the government informed the Parliament that Air India's is expected to increase total revenue by nearly 10 per cent to Rs 22,521 crore in the current financial year.
Significantly, apex auditor CAG, on March 10, said Air India "actually incurred" an operating loss of Rs 321.4 crore in 2015-16, even as the airline maintained it had an operating profit of Rs 105 crore based on generally-accepted accounting standards.
However, Air India had said the "operating profit of Rs 105 crore is as per the generally accepted accounting standards" and was calculated on the basis of reducing total expenditure excluding only the financing costs from total revenue.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)