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AAI enhances Covid19 relief measures to concessionaires & licensees

By Rajiv Raghunath - December 10, 2020

Releases new commercial circular on ‘Concessionaire Support Scheme’

Airports Authority of India (AAI) in a commercial circular issued to AAI regional executive directors and airport directors on December 9, 2020 on ‘Concessionaire Support Scheme’ has notified that the concessions extended to the media owners in a commercial circular issued on August 14, 2020 will be extended up to December 31, 2020, or “till such time passenger traffic in three consecutive months’ during FY 2020-21 or FY 2021-22, equals to 100% of traffic during corresponding three months of previous two years average, i.e., 2018-19 and 2019-20, whichever is earlier”.

Moreover, the license fee / minimum monthly guarantee (MMG) for the period January 1, 2021 to June 30, 2021, calculated on the basis of a formula given in the AAI commercial circular issued on August 14, 2020, will be discounted by a further 40%, and a further 20% for the period July 1, 2021 to December 31, 2021. However, the circular states that in the case of Duty Free Shops (DFS) concession, the sales per pax has improved during July 2020 to September 2020 as compared to the corresponding period of 2019, so no discounts will be extended to the DFS concession.

The circular stipulates that commercial concessionaires may be given a relaxation on account of security deposit to be maintained with AAI, but subject to the conditions:

• 50% of the amount of security deposit mentioned in the agreement is to be retained, that includes the bank guarantee as well as the cash component of the deposit --which will not be reduced.
• The aggregate of bank guarantee and cash shall not be less than the requisite security deposit for 4 months licensee fee / MMG.
• For a partial release of security deposit, the licensee should have cleared outstanding dues for the period till the preceding month.

Further, commercial concessionaires may be given an option to get their respective contracts extended for a period equivalent to the remaining contract period w.e.f. March 25, 2020, or 3 years, whichever is lesser. However, this option will not be extended to contracts that are already in the extension period, or thoseawarded after March 25, 2020.

Just as Master Concessionaires (F&B/retail), DFS, Advertisement Licensees have been given the option to exit their respective contracts without demurrage charges in view of the ‘Force Majeure’ clause, the same relief measure will be extended to licensees operating stand-along concessions which do not have the ‘Force Majeure’ clause. “Accordingly, the agencies would be permitted to exit by serving requite notice period as provisioned in the agreement without attracting punitive measures”.

 

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