Mumbai Airport To Put Kingfisher On Cash & Carry
India's Mumbai Airport on Thursday sent a legal notice to struggling Kingfisher Airlines threatening to put it on cash and carry from Saturday citing non-payment of dues, a source close to the development said.
"This is with regards to the dues worth 90 crores (INR900 million rupees or USD$17.5 million) which were not cleared by Kingfisher for the past six months," according to a source who did not wish to be identified.
Kingfisher will have to pay the airport -- owned by a consortium of investors led by infrastructure firm GVK Power -- INR500,000 - INR600,000 a day to operate its daily flights from the airport, said the source adding the airline has not yet replied to the notice.
"As a matter of policy we do not comment on supplier and partner relationships," Prakash Mirpuri, vice-president, corporate communications, Kingfisher, said in a statement.
It said its flights will operate as "normal", per its revised schedule on the company's web site.
Kingfisher, which has not made a profit since its launch in 2005, is facing a series of financial difficulties. It has eroded its net worth after reporting a doubling of its loss in the fiscal second quarter on higher fuel prices and operating costs.
The airline has been asked by its creditors to raise USD$160 million in equity while holding debt restructuring until it has a credible plan.
On November 24, AerCap, one of its aircraft lessors, said it would take back two of its aircraft in coming months on disagreement over extension terms.
Many Indian carriers including state-run Air India are troubled by rising fuel costs and price wars emanating from intense competition causing investors and government to worry about their survival.