Oil companies stop fuel supply to Air India in six airports, flights not yet hit

MUMBAI: Oil marketing companies (OMC) stopped Air India’s jet fuel uptake in six airports, including Kochi, Pune, Patna, Ranchi, Vizag and Mohali over payment defaults on Thursday afternoon.

“Around 4 pm, Air India was 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 so as to have enough fuel to operate the return flight without refuelling at any of these stations,” said a source. Last month, Indian Oil Corporation (IOC) had threatened to stop fuel supplies, but the matter was resolved following intervention by the civil aviation ministry.

An Air India spokesperson confirmed the development. “In the absence of equity support Air India cannot handle the huge debt service liabilities. Our financial performance however this fiscal is very good and we are moving towards a healthy operating profit. The airline despite its legacy issues is performing very well,” said the AI spokesperson.

Cash-strapped AI which has a debt of more than Rs 54,000 crore, owes about Rs 3500 crore to oil companies. “About Rs 60 crore payment was released in the evening. We hope the matter is resolved and we can keep the planes flying,” said a source. To bring down AI’s annual interest payment liability, the government, in the process of privatizing the national carrier, transferred about Rs 29,000 crore of working capital debt to Air India Asset Holdings, a special purpose vehicle. 

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