AAI files lawsuit against KFA

The airline owes AAI Rs 300 crore in unpaid airport usage fees

Airports Authority of India (AAI) has filed two lawsuits against Vijay-Mallya promoted Kingfisher Airlines to recover Rs 300 crore in unpaid airport usage fees.

V P Agrawal, chairman, AAI, said, “We have filed a criminal lawsuit against Kingfisher Airlines as cheques of Rs 117 crore given by the company has been returned by banks due to insufficient funds. AAI has also filed a civil lawsuit in Mumbai to recover remaining dues of around Rs 183 crore from the airline.”

The lawsuits filed for recovering dues of Rs 300 crore from Kingfisher Airlines is exclusive of payments guarantees given by banks.

Kingfisher, which has dues of over Rs 10,000 crore to lenders, suppliers, aircraft leasing companies, employees, airport operators, has been facing several lawsuits from its creditors.

Recently, a consortium of 14 banks led by State Bank of India (SBI) who has combined exposure of Rs 7000 crore to the now-grounded airline moved the Debt Recovery Tribunal (DRT) and Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest (Sarfaesi) Act to recover dues. The consortium moved DRT to encash collaterals as Sarfaesi does not cover all securities.

The Sarfaesi Act, for one, does not cover the two helicopters offered as collateral, a personal guarantee The banks plan to sell Kingfisher House in Vila Parle, Mumbai and a villa in Goa owned by Vijay Mallya.

In April this year, Kingfisher Airlines had submitted a fresh revival plan to regulator Directorate General of Civil Aviation (DGCA). But the permission to resume operations was not forthcoming as the airline failed to get no-objection certificates from various stakeholders including airport operators, jet fuel suppliers, spare parts vendors and bankers.

At its peak Kingfisher Airlines used to operate 374 flights within India and to eight international destinations. Overall it flew 66 aircrafts to 68 locations and had market share of around 20 per cent.

The airline, however, has been incurring losses since its inception in 2005 due to aggressive expansion plans and acquisition of a leading low-cost carrier in India. Its plan to fly A380 too backfired to tepid growth of air traffic in India.

The airline suspended operations in Oct 2012 following a strike by its employees. The government later cancelled its license and said it would not let the airline resume operations till it submitted a viable revival plan. Kingfisher has two years till December 2014 to renew its license.