BIAL plans legal action against KFA

BANGALORE: Bengaluru International Airport (BIA) has decided to take legal action against Kingfisher Airlines (KFA) for non-payment of dues. The beleaguered airline owes BIA about Rs 60 crore as of October towards landing and parking charges, aerobridge, facility management, passenger service fee (PSF) and user development fee (UDF).
Multiple sources privy to the development said the board of BIAL (Bangalore International Airport Ltd), the promoter and operator of BIA, which met some three weeks ago, gave the go-ahead for initiation of legal action.
“The management has to take action as the airline has been given a long rope,” sources in the Karnataka government who have been briefed on the matter said. The Central government and the Karnataka government have a 13% stake each in BIAL.
In an emailed response to TOI’s query on the board decision, a BIAL spokesperson said, “As an organization, BIAL respects its relationship with its customers and we would not like to share specifics on how we engage with our customers.”
Repeated calls and text messages to Sanjay Reddy, MD, BIAL, and vice chairman of the GVK Group, which owns the majority stake in BIAL, went unanswered. BIAL’s legal counsel Sajan Poovayya declined to comment.
Information available with TOI shows that KFA owes BIAL Rs 25 crore as UDF and Rs 14 crore as PSF, which are collected by the airline on behalf of the airport from passengers. Other dues such as landing and parking fees, aerobridge and facility management charges amount to Rs 15 crore.
Sources said BIAL was exploring legal action against KFA on three grounds: criminal action in a cheque bounce case; civil action for recovery of money and attachment of properties; and a winding up petition. KFA has cumulative losses of Rs 8,000 crore.
The Chhatrapati Shivaji International Airport in Mumbai, operated by the GVK Group, had filed three cases against KFA in connection with cheque bounces. Sources at the airport said KFA owes the operator Rs 65 crore towards airport charges.
Sidharath Kapur, CFO of GMR Airports, which operates the Delhi and Hyderabad airports, said KFA owes Rs 64 crore to the company. Of that, Rs 20 crore is towards aeronautical charges, and the remaining Rs 44 crore towards PSF, UDF and airport development fee (ADF).
“We are looking at ways to get this money out of KFA,” said Kapur.
Repeated calls and text messages to Sanjay Reddy, MD, BIAL, and vice chairman of the GVK Group, which owns the majority stake in BIAL, went unanswered. BIAL’s legal counsel Sajan Poovayya declined to comment. KFA had not responded at the time of going to print.
KFA owes BIAL Rs 25 crore as user development fees and Rs 14 crore as passenger service fees , which are collected by the airline on behalf of the airport from passengers. Other dues such as landing and parking fees, aerobridge amount to Rs 15 crore.