Air India pays part of dues, gets accounts defreezed

Dec 08, 2011 |

IANS

New Delhi

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National carrier Air India on Thursday said several of its bank accounts were defreezed after the airline made a partial payment on the Rs.100 crore dues it owes to the Mumbai service tax department.

"Our accounts were defreezed after we made a partial payment on our dues," an Air India official told IANS from Mumbai.

The Mumbai service tax department had seized several bank accounts of the cash-strapped Air India and Kingfisher Airlines for non-payment of dues.

The airlines are mandated to collect service tax from passengers and then deposit the same to the government department.

For example, passengers currently pay Rs.150 for domestic travel and Rs.750 for international travel by economy class.

The national carrier also owes Rs.2,300 crore to oil marketing companies (OMCs), Rs.75 crore to airport operators, and Rs.367 crore to other vendors. It has a working capital loan of Rs.22,000 crore and a Rs.21,000 crore debt for buying new aircraft.

The Vijay Mallya-promoted Kingfisher Airlines has dues of Rs.70 crore. Kingfisher officials did not offer any comments on the bank account seizures.

The airline is struggling to meet its huge financial liabilities. Recently, the GVK-led Mumbai International Airport Ltd (MIAL) had threatened to place the airline on a cash-and-carry basis by Saturday if the carrier failed to clear Rs.90 crore in dues which are pending for the last six months.

The company also owes dues to the Airports Authority of India (AAI), OMCs and the GMR Group-led Delhi and Hyderabad airports.

The carrier has also curtailed its 50 daily flights, citing technical and route rationalisation issues.

The airline has not posted any profit since its launch five years ago and reported a net loss of Rs.1,027 crore last fiscal and Rs.468.66 crore in the last quarter.

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