GoAir makes part payment of dues to AAI, gets reprieve

The airline paid Rs 5 crore of the Rs 40 crore it owes

The Wadia-group run airline GoAir has made a part payment of its outstanding dues and has secured a temporary reprieve from the Airports Authority of India (AAI).

GoAir had pending dues of about Rs 40 crore with the AAI. Last week the AAI issued a notice to the airline to immediately pay the outstanding or lose credit facilities. Losing credit facilities means the airline will have to pay the airports operator in advance for its flights.

GoAir had paid about Rs 5 crore to the AAI and its outstanding dues were about Rs 35 crore, an aviation source said. The airline has a bank guarantee of Rs 30 crore with the AAI, sufficient to cover dues for two months.

The airline said the AAI notice only mentioned bringing down dues to the guarantee amount. The AAI’s billing cycle covers a fortnight and airlines get fifteen days’ credit after issue of bills. However, most airlines make part payments because the amount is covered by bank guarantees. "GoAir has been irregular in making payments to the AAI in the last few months and hence the notice was issued to the airline,'' the source added.

“As agreed with AAI, we have reduced our outstanding through some payments. Additional amounts will be paid shortly, in any case, within the timeline shared with the AAI to bring it down to the bank guarantee level. Although the industry is going through turbulent weather, GoAir has been able to achieve remarkably positive results in the third quarter, and we do not foresee problems in the future,'' said a GoAir spokesperson.

Sources, however, pointed out GoAir's load factor in October (72.6 per cent) and November (75.3 per cent) were among the lowest while its market share was more or less flat at around nine per cent. Profit slumped 95 per cent to Rs 5.4 crore in 2013-14 from Rs 104 crore the previous year.