Panic gripped in Air India for a few hours after the Oil Marketing Companies (OMCs) on Monday suspended ATF supply for Air India domestic flights for few hours owing to payment default. Refueling of all domestic Air India flights from eight locations was stopped. This includes Mohali, Patna, Pune , Trivandrum, Lucknow, Vishakhapatnam, Coimbatore, Jaipur. However, it was resumed later by OMCs after Air India paid their dues partially. The oil marketing companies have earlier threatened to stop ATF to Air India unless it clears its fuel bill on a daily basis even as the national carrier’s dues to oil companies have crossed Rs 5,000 crore.
“We have been instructed by our Head Office that Oil Marketing Companies have decided to suspend supplies to all domestic flights of Air India group at eight locations. Mohali, Patna, Trivandrum, Jaipur, Lucknow, Visakhapatnam and Coimbatore from 4 pm on October 8,” Bindu R, Chief Airport Terminal Manager said in a letter to station managers of Air India.
According to sources, it was resumed later by OMCs after Air India paid their dues partially. Air India so far has been paying Rs 20 crore daily but has been defaulting on payments lately. The Oil marketing companies now want past dues to be cleared first. This move comes at a time when rupee is all time low and crude prices are rising which is hurting the financials of all airline companies. The oil companies have been discussing with Air India to clear dues worth Rs 5000 crore that are pending for a while now.
The Government has already infused about Rs 980 crore into the airline as equity and granted the airline sovereign guarantee to raise Rs 2,000 crore from banks. Out of this, Air India has already raised Rs 1,500 crore and can raise Rs 500 crore more. “The airline can raise that Rs 500 crore and pay a part of it to the oil companies,” said an official quoted earlier.