DIAL,HIAL to snap credit line to AI?

“We have informed the aviation ministry that we cannot now further give credit to Air India. We share revenue with Airports Authority of India (AAI) on the basis of projections and not on cash received. So,we have already shared almost R170 crore with AAI by market borrowings even as if we have not received payment from AI,” said a GMR official.

GMR group chairman GM Rao had met the Prime Minister Manmohan Singh last week to resolve the dues-related issues with the national carrier. Rao had proposed to the PM that in absence of payment from Air India,DIAL should be allowed to share revenue with AAI on cash basis.

“We’ll have to amend OMDA (operation,management and development agreement) to change the revenue sharing terms. Which cannot be done,” a top aviation official said.

When contacted an Air India official disputed the claim made by private operator of IGI airport. “The actual dues is only R150 crore,” he said.

This may come as another blow for the airline that has been struggling hard to sail through its financial mess owing to huge fixed costs such as insurance,aircraft lease,loan. The problem has gone from bad to worse so much so that the carrier has even defaulted on payment of salaries to its employees many times.

The airline has an accumulated loss of over R20,000 crore and has a loan book of over R60,000 crore of which R21,000 crore is the working capital loan.