By Aditi Calra
New Delhi (Reuters), the Financial Capital of India in Mumbai, managed by the Adani Group, has caused lobbying efforts by the best carriers Indigo and Air India after changing the payment rules, citing financial needs and the risk of failure to comply with the airline, the documents show.
The airport is one of the busiest in India at a time when dozens are added to one of the fastest growing aviation markets in the world. This is the largest of the seven, run by a group, led by billionaire Gautam Adani.
Reuters -observed confidential letters show an intensive discount on change, which is looking for a compulsory bank deposit as a guarantee against fees such as landing and parking fees instead of long -standing bank guarantees practice.
“None of these airlines usually pay on time … We want to bring our cash flow to the cash flow to the airlines,” said Aruun Banal, CEO of Adani Airport Holdings, which has a share of 74% at the airport.
“They took advantage of our nice,” he added, citing the resistance to the new payment system from Indigo and Air India after the change eight months ago in October.
Airlines often delay payments after the maturity date at the end of the month, but the airport has to pay the authorities earlier, creating challenges for working capital that can be resolved by using the security deposit when needed, Banal said.
Indigo and Air India, which together have a share of 91% of the India market, did not respond to Reuters requests.
A source with direct knowledge of the subject said the new policy would require the two airlines to make deposits of about 2 billion rupees ($ 23 million) combined.
For Air India, owned by Tata Group Conglomerate, such payments can strain their finances after a $ 521 million accumulation last year, in addition to $ 50 million after Pakistan closed its airspace for Indian airlines.
Mumbai International Airport LTD (Mial), which serves 53 million passengers last year, also faces financial challenges after posting losses of $ 71.11 million with $ 461 million in revenue last year, revealing reveals.
In a letter from December 31 to the airline body, the airport justified the change, indicating its “deterioration of the financial situation” and “significant debt obligations”.
“Deposits will help Mial’s financial stability and credit rating,” he added.
Default risk, Air India Push
The change also aims to protect the airport from risks such as airline bankruptcy, as are the Jet Airways, Go First and Kingfisher Airlines carriers in the last few years, Banal said.