India’s Financial Express newspaper quotes Sidharath Kapur, chief financial officer of Delhi International Airport Ltd (DIAL), saying on Tuesday (April 10): “If payments are not made, there may be a situation after two months that we may not be able to operate and pay our employees.”
Kingfisher and Air India jointly owe about 525 billion rupees (US$10.2 billion or B315 billion) to DIAL that is run by airport developer GMR. The Delhi airport, which handled 35.9 million passengers in 2011-12, is India’s busiest airport.
Mr Kapur said the company is losing 40 billion rupees (B24 billion) every month.
DIAL has asked Air India to pay 300 billion rupees (B180 billion) immediately out of its dues of 450 billion rupees.
Kingfisher owes the rest at 75 billion rupees (B45 billion).
“Kingfisher has started paying five million rupees per day. We have asked them to raise it by another two million rupees,” he said. Kingfisher’s dues are not climbing since the airline has reduced operations, but the case of the public sector airline is different.
The DIAL management, led by GMR chairman GM Rao, met reporters on Tuesday to release an NCAER report titled “Economic impact study of Delhi airport”.
The study claims the airport has contributed about 0.5 per cent to the GDP of the country in 2010-11. Mr Rao, however, steered clear of mentioning the financial crisis at Delhi airport, focusing instead on the findings of the study.
DIAL’s aeronautical revenues rose from 361 rupees in 2008-09 to 459.7 billion rupees in 2010-11 on total revenues of 1,261 billion rupees, Mr Kapur said. But the company is still expected to incur a loss of 450 billion rupees.
The airport developer expects to end 2011-12 with a cumulative loss of about 950 billion rupees. Higher provisioning for depreciation and capitalisation costs have also added to losses, he said.
According to Kapur, the losses have ballooned so much that banks are wary of
extending loans to meet operating needs.
“We have already borrowed 5,300 billion rupees (B3,182 billion) from foreign and domestic banks. No bank will give us more money considering our losses,” he said.
DIAL has also been pitching for an over 600 per cent hike in aeronautical charges with the Airport Economic Regulatory Authority.
Though a decision in this regard is expected by next week, according to industry officials, the hike may not be more than 334 per cent. And that will benefit the company only from the current fiscal.
“We hope the regulator accepts our proposal. A 600 per cent hike would translate into an average additional cost of 350-450 rupees (B210-270) per passenger,” another DIAL official said.