AAI reverts to collecting dues directly from foreign airlines

The Airports Authority of India (AAI) has reverted to direct billing and collection of navigation charges from foreign airlines that operate to India or fly over Indian airspace.

This comes in the wake of court orders in the Devas arbitration matter in Canada and Switzerland that led to the seizure of over $29 million of AAI dues, by the International Air Transport Association (IATA) on behalf of AAI.

As an air navigation service provider, AAI collects navigation charges from domestic and foreign airlines for flights within the country, to and from India and those flying over Indian airspace.

Domestic airlines pay the charges directly to AAI. Since 2007 IATA has been collecting overflight charges from foreign airlines. Over a period, the procedure has been automated and air traffic data is shared with IATA to make the process simpler and error free.

“AAI has started billing and collection with effect from April 1 from foreign operators. The collection would be through AAI bank account and is done to protect the interest of AAI,” the authority’s spokesperson said.

“While we are disappointed with the AAI decision, we understand and respect it. We will continue to engage with AAI and collaborate across other common areas of interest,” IATA said in an email.

In financial year 2019-20 (FY20), AAI collected over ~3,592 crore in navigation charges from domestic and foreign airlines and this accounted for 28 per cent of revenue that year. The next year saw a 55 per cent drop in collection of navigation charges due to the Covid-19 pandemic. In FY21, AAI collected over ~1,587 crore in navigation charges, accounting for 32 per cent of its revenue that year.

However, three Mauritiusbased shareholders of Devas Multimedia had secured the seizure of AAI and Air India dues held by IATA from a Canadian court in November and December. Subsequently, in January, the Superior Court of Quebec in Canada set aside the seizure of AAI dues and limited the seizure of Air India dues to 50 per cent. But before the funds could be released and remitted to AAI, an order was passed in a Swiss court to attach the dues.

Move comes after courts ordered seizure of over $29 mn in dues in the Devas case