Kingfisher lessors pay Rs 1 crore to AAI to fly back their planes

NEW DELHI: Foreign aircraft leasing companies wishing to repossess their planes from near bankrupt Kingfisher are paying Airports Authority of India (AAI) about a crore for flying each plane out of India. Kingfisher owes about Rs 290 crore to the staterun AAI and the latter told the airline it would not allow any lessor to repossess aircraft from it — due to non-payment of lease rentals — to leave India unless the dues are cleared.

"About two months back, Kingfisher paid us Rs 1-2 crore so that a lessor could take their aircraft back. Later, the airline could not even pay that much. Now lessors are coming to us and paying money. So far, three aircraft have been repossessed by lessors by paying us Rs 1 crore per plane. Kingfisher has not paid them and they are paying us so that the planes can be leased out to some other airline abroad," said a senior AAI official.

AAI says the interest component on its dues works out to Rs 5 crore a month. “Kingfisher was making the maximum noise for allowing FDI by foreign airlines. That has been allowed and even now there is no movement on Kingfisher getting funded and beginning to pay vendors, service providers and employees,” said the official.

A senior Kingfisher official said India must address the twin issues of exorbitant jet fuel price and airport charges before foreign airlines would start putting money. "We are in talks with some investors and the process of getting funds will take some time," the official said.

Meanwhile, a highly placed aviation source said Kingfisher promoter Vijay Mallya would need to dilute the airline’s bank loans of Rs 8,000 crore and other liabilities before a foreign airline pays money.

"No foreign airline would give money to a promoter to pay off his dues. Investors want to put money in the company to improve it. Mallya needs to raise funds somehow and dilute Kingfisher debt if FDI has to work for him,” the source said, while dismissing the Kingfisher official’s argument of high jet fuel and airport charges.

"The operating environment surely needs improvement but it is the same for all airlines. As of now, Indi-Go is the most sought after Indian airline for investment from foreign carriers but the promoters of the former are in no mood to dilute their stake. SpiceJet, Jet and GoAir are also likely to get funds from FDI route. Kingfisher has to do a lot to attract investors," the source added.