The financial strain faced by airlines in India due to the Covid-19 pandemic has diminished their ability to pay dues to the Airports Authority of India, a state-owned body that maintains more than 100 airports in the country.
An airline has to pay various charges such as air navigation, landing, parking etc to the authority while using its facilities.
The dues of four major airlines – IndiGo, SpiceJet, GoAir and AirAsia India – have more than doubled between February and July, the Press Trust of India reported, citing senior officials.
However, the biggest defaulter happens to be the state-owned airline Air India, and its dues increased by 2.75% to 22.58 billion rupees during the period. It forms nearly 88% of the total dues (25.62 billion rupees, or US$348 million) owed by six major airlines as on August 1 – an increase of 10% from February 1.
Tata-owned joint venture airline Vistara was the only one to reduce its dues during the period.
The dues of India’s leading airline IndiGo increased to 1.30 billion rupees on August 1 from 416 million rupees on February 1.
In the case of SpiceJet, the second-largest airline, it was 1.32 billion rupees on August 1, while it was 653 million rupees on February 1. On August 1, the Airports Authority of India put SpiceJet on cash and carry mode, which means the airline has to pay charges daily at airports to operate flights.
Another budget carrier, GoAir, was also put on cash and carry mode from August 10 after its dues mounted more than three-fold from 169 million rupees on February 1 to 521 million rupees on August 1.
Of the two Tata-owned joint ventures, AirAsia India’s dues increased from 960,000 rupees from February 1 to 189 million rupees on August 1, while Vistara’s dues decreased to 43 million rupees on August 1, from 57 million on February 1.
The aviation sector has been hugely impacted because of travel restrictions due to the coronavirus pandemic. Flights were suspended from March 25 and on May 25 onward a limited number of domestic flights were allowed. However, international flights have not been restored.
Airlines are struggling to meet their high fixed costs, while their revenues continue to be low due to the limited number of flights and modest patronage, as flyers remain wary of traveling. Airlines have instituted various cost-cutting measures such as pay cuts, layoffs or leave without pay during the last few months.
Airlines consultancy firm Centre for Pacific Aviation has projected the consolidated loss of India’s airline industry at $4-5 billion in FY 2021. It said Indian domestic passenger traffic this fiscal year will be about 40-50 million, as against 137 million last year.