Fuel Supply To Air India Restricted At Six Airports Due To Non Payment Of Dues

State-owned Oil Marketing Companies (OMCs) have restricted jet fuel supply to the state-run airliner, Air India at six domestic airports due to non-payment of dues. The OMCs include Bharat Petroleum, IndianOil and Hindustan Petroleum have stopped jet fuel supply at Kochi, Pune, Patna, Ranchi, Vizag and Mohali citing payment default.

At 4 pm on Thursday, August 22, Air India informed that it would not be able to uptake fuel in these six stations. On flights operated to these airports, Air India is currently uploading double the fuel quantity to have enough fuel to run the return fuel without refuelling at any of these stations.

OMCs usually extends a credit period of 90 days to its customers. However, Air India’s credit had surpassed 200 days in delayed payment of dues.

“However, the flight operations of the airlines remain normal and unaffected as flights have been loaded with return sector fuels”, a senior airline official told the media.

Facing severe financial crunch, Air India has a debt of more than Rs 54,000 crore and owes about Rs 3500 crore to oil companies. “We are in discussion with the OMCs to resolve the issue. Additionally, we have also paid Rs 60 crore for past supplies and made today’s payments as well, ” a senior official told the media.

To bring down Air India’s annual interest payment liability, the government is in the process of privatising the national carrier and has transferred nearly Rs 29000 crore of working capital debt to Air India Asset Holdings.

“Our financial performance, however, this fiscal is excellent, and we are moving towards a healthy operating profit. The airline, despite its legacy issues, is performing very well,” he added.

The national carrier has been facing challenges to make payments for w while now. Last year the government was unsuccessful in selling a 76 per cent stake in Air India due to a lack of interest from bidders citing substantial stake sale terms. It is now revamping the stake sale plans, and as part of the effort, it has got rid of some of the loss-making airline’s debt of $8.5 billion.

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