Delhi International Airport (DIAL) has invoked the force majeure clause in order to temporarily halt its revenue-sharing agreement with Airports Authority of India (AAI).
DIAL, which operates the Indira Gandhi International Airport, made the decision since air traffic and revenue were impacted due to the pandemic, according to a report by Business Standard.
Also read: Domestic air passenger traffic up 33.6% MoM in October
The report said DIAL paid 45.99 percent of its annual revenue as concession fee to state-run AAI, as per an agreement signed in 2006.
DIAL transfers the annual concession fee on a quarterly basis in an escrow account, after which AAI deposits the amount into its own account.
Moneycontrol could not independently verify the story.
A spokesperson for DIAL had not yet responded when contacted by Business Standard.
"A resolution to invoke the force majeure clause was passed by the DIAL board in November. Accordingly we had approached AAI for a cease on revenue share till traffic was back to normal levels," a source told the paper.
The source said DIAL intended to use the money in the escrow account for airport maintenance.
DIAL earlier this year moved the Delhi High Court to recover dues worth Rs 399.2 crore paid to AAI since April 2020. In September, the Delhi HC asked AAI to submit a note declaring the treatment of Rs 399.2 crore deposited by DIAL in the escrow account.
Mumbai International Airport (MIAL), too, earlier this year invoked force majeure clause while paying its dues to AAI. On December 1, the Delhi HC restrained AAI from collecting 38.7 percent of Mumbai airport's revenue.
Air traffic has been severely impacted after flight operations were haled in late-March due to the COVID-19 pandemic. Domestic flight operations resumed in May and traffic is recovering. International flights continue to be suspended, with only flights through air bubble arrangements and the Vande Bharat Mission currently permitted.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
