AAI decides to put Kingfisher Airlines on cash-and-carry mode from June 30, 2009

Airports Authority of India (AAI) has decided to disallow credit to Kingfisher Airlines and put the airline on cash-and-carry mode (no credit, needs to pay in cash immediately for using airport facilities). The airline’s current dues with AAI are learnt to have exceeded its bank guarantee of Rs 100 crore by Rs 53 crore. According to a report in Times of India, a top official from AAI said, “Till the airline clears these dues, we have decided to put it on cash-and-carry mode from June 30, 2009. This decision was conveyed to Vijay Mallya when he came to the Ministry some days back.” This is the first time AAI has decided to put an airline on cash-and-carry. Last month, Indian Oil had encashed Kingfisher Airline’s bank guarantee of Rs 50 crore after the latter's cheque had bounced.

In the past also there have been many occasions when Kingfisher Airlines airport dues have crossed its bank guarantee and at least one time the cheque given by the airline to AAI bounced due to insufficient funds. The airline later made the payment to the authority.