Kingfisher operating payments at Mumbai International Airport are overdue

It appears that Kingfisher's troubles may not yet be over.

After the carrier flirted with financial disaster last month, a report from the Economic Times suggests that new trouble is on the horizon for India's self professed "King of Good Times."

According to the report, Chatrapati Shivaji International Airport (CSIA) has sent notice to Kingfisher that it must pay the dues owed to CSIA, or risk the possibility of shutting down its operations.

"From Saturday, Kingfisher will be put on a cash and carry mode if it wants to continue operating out of Mumbai airport," a CSIA spokesperson said.

Kingfisher apparently has about 90 crore rupees worth of unpaid operating charges in Mumbai, and checks written from Kingfisher over the past three or four months to CSIA to clear these operating dues have bounced.

Under a cash and carry system, Kingfisher, which has around 57 daily domestic departures from Mumbai in winter 2011-2012, would be forced to pay cash at the beginning of each operating day before starting up flights in Mumbai. With Kingfisher's credit worthiness in the tank after its recent shenanigans, CSIA will no longer honor non-cash payments from them.

The CSIA spokesperson stated that they [CSIA] have asked Kingfisher to pay Rs. 50-60 lakh daily, about half of which will fund operations with the remainder being used to pay off Kingfisher's bills. He added that, "If the airline does not pay up then we have the option of going to he civil aviation regulator to explore which airlines have sought extra slots from Mumbai as if the airline does not pay up it will be asked to stop services from here."

Kingfisher assured its passengers in a statement Thursday that operations from Mumbai would continue as normal, and that there would be no disruption of operations.

These types of issues are not new for Kingfisher, as the airline has been shut out by its suppliers numerous times over the past year, most notably with fuel.

Beyond its troubles in Mumbai, Kingfisher also has outstanding lease payments due to lessors, who have already begun to re-possess their aircraft. Furthermore, Kingfisher has been placed on cash-and-carry by the Airports Authority of India as well, and its 400 crore equity line hinges on a sustainability report from SBI Caps, which will be presented to lenders in the near future.

While these types of problems are understandable as Kingfisher attempts to right its financial state, one can only wonder at how this type of headline will affect the business travelers that are Kingfisher's new core passengers.

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Foreign airlines pulling out of India as economy slows and airports hike fees

Japan Air Lines (JAL) has announced a reduction in its Tokyo New Delhi flight from a daily to four times a week.

JAL joins a large list of foreign carriers like Aeroflot, Austrian Airlines, Dragonair, Virgin, Singapore Airlines, British Airways, Finnair, Delta, KLM, All Nippon Airways (ANA), Sri Lankan, Air France, Lufthansa, and Malaysia Airlines, who have either withdrawn or cut back on their Indian operations over the last six months.

While the slowing economy is a reason, experts give significant attribution to the hikes in airport fees at a time when the rest of Asia Pacific airports are lowering their fees in a bid to attract or retain airlines and stimulate air travel.

Readers will recall that recently the Government permitted the private airport operators at Mumbai and Delhi to impose high Airport Development Fees, this on top of a 10% across the board increase in airport fees early this year.

Another reason for the withdrawals has been the massive capacity expansion by middle-east carriers like Emirates. One might even consider it capacity dumping.

Foreign airlines are also complaining of discriminatory treatment at the hands of many of the airport operators. They claim that despite being prompt on payment, the domestic airlines are being given discounts on dues even when they pay 90 days late.

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