Air Sahara windfall story
Air Sahara has made more money from the dispute rather than running the airline, report Lalatendu Mishra and Indulal PM.india Updated: Apr 10, 2007 23:04 IST
Air Sahara has made more money from the dispute rather than running the airline.
The Lucknow-based airline is learned to have earned close to Rs 81 crore in the form of interest that it received from Rs 1,500 crore deposited in the Escrow account by Jet Airways over the last nine months. Apart from this it has been getting interest income from Rs 500 crore that was paid in advance to Subroto Roy as part of the deal against 100 per cent equity of the airline. According to insiders the airline has been getting Rs 7 lakh per day as interest from this advance and this works out to be nearly Rs 18 crore for nine months since the dispute broke out.
So put together Air Sahara has earned close to Rs 100 crore from this head alone.
An Air Sahara official told HT that they need Rs 17 to 18 crore a month to run the operations and considering the interest income they in fact made more money rather than losing. "Any way there was revenue from passenger and cargo service. And the interest income took care of bulk of our expenses."
While referring the matter to arbitration, the Bombay High Court in its September 22 judgment said the Jet Airways can withdraw the money deposited in the escrow account while, the interest accrued will go to Air Sahara.
Jet lawyers had submitted before the court that the company was losing Rs 22 lakh per day on interest against the money deposited at the escrow account opened with ICICI Bank Nariman Point.