Air Asia X given extra time by TIA to pay duesTribhuvan International Airport (TIA) has given Malaysian-based low-cost carrier Air Asia X three months’ extra time to pay its dues totalling about Rs400 million, airport officials said Tuesday.
Tribhuvan International Airport (TIA) has given Malaysian-based low-cost carrier Air Asia X three months’ extra time to pay its dues totalling about Rs400 million, airport officials said Tuesday.
“They made a request for some more time,” said Raj Kumar Chettri, general manager of TIA. Officials of TIA and Air Asia held a meeting lasting till Monday night to discuss the outstanding payment.
“After the carrier’s assurance to pay the dues, we agreed to extend the deadline for another three months. We have signed an agreement accordingly.” However, as a demonstration of its commitment, Air Asia has to produce a bank guarantee for Rs250 million by Sunday, said Chettri. “If they fail to produce the bank guarantee, their operations will be stopped from Sunday.”
According to Chettri, the carrier owes TIA Rs270 million in fees and Rs130 million in fines. As per the Airport Service Charge Regulation, if an airline fails to pay its dues by the stipulated time, there is a provision for charging a penalty of 5 percent for 15 days, 15 percent for 16-30 days and 30 percent for the rest of the period.
Air Asia X paid Rs20 million in January. The Malaysian carrier has the highest amount of dues among the domestic and international airlines with outstanding payments to TIA.
Airport officials said that the carrier had been given a deadline extension because it requested to reconcile its Nepal transactions. The purpose of reconciliation is to provide consistency and accuracy in financial accounts, explaining the difference between competing financial records.
“As we have claimed Rs400 million, Air Asia wants to confirm whether the dues are correct or matches the amount that we have claimed,” said Chettri.
Two senior officials of Air Asia X are currently in Nepal for talks after TIA issued an ultimatum to clear the dues by Tuesday or cease Nepal operations. “Two officials of the carrier are due to arrive to look after the accounting of the carrier’s transactions.” After they submit their claim, the two sides will sit down and finalize the actual amount of dues, he added.
TIA’s revenues come from passenger service charge, airport development tax, landing and parking fees, rentals, housing and cargo, and among others. Air Asia entered the Nepali market in June 2012 with two weekly flights.
According to TIA, 1.87 million travellers passed through the airport in the first six months of 2017, up 12.79 percent compared to the same period last year. Malaysian-based low-cost airline Malindo Air saw the strongest passenger occupancy recording a 132.56 percent growth to 68,115 passengers. Meanwhile, Air Asia X saw a sharp 50.69 percent drop in passenger numbers to 43,375 individuals.
Besides these two airlines, Nepal and Malaysia are connected by Malaysian Airlines, Nepal Airlines and Himalaya Airlines.
The Kathmandu-Kuala Lumpur sector has become the main battlefield in the fare war raging among international airlines connecting Nepal. Industry sources said that with more carriers flying this route, the competition has intensified to the benefit of travellers.