AI flights cancelled: Pauper Maharaja can't pay for fuel

Flights to resume as oil companies arrive at settlement

sweta-ranjan

Sweta Ranjan | May 27, 2011




Tough times for Air India do not seem to be ending. After the pilots’ strike last month, the national carrier is facing a bigger embarrassment. On Friday, a total of 15 flights had to be cancelled and more cancellations are expected. The reason: it has no fuel, because it has not paid dues to public-sector oil marketing companies, which won’t give it aviation turbine fuel (ATF) anymore without ready cash. However, by Friday afternoon the firms agreed for a settlement and the flights were likely to normalise soon.

On Friday morning, five flights from Chennai (including one international), five flights from Kerela (including one international), three flights from Mumbai and two flights from Delhi were cancelled, an Air India spokesperson confirmed. Hyderabad sector was also affected.

The mismanagement of Air India and the murder of Maharaja: Read more in the current issue of Governance Now

Indian Oil Corporation, Bharat Petroleum Corporation Ltd and Hindustan Petroleum Corporation left the national carrier stranded because of non-payment of dues of Rs 1,300 crore, sources told Governance Now, though officials were tight-lipped and refused to divulge the reason behind flight cancellations.

This oil companies’ move could have had a large-scale impact as fresh reports of flight cancellations are coming in from across India. According to the sources, the problem was expected to spread further to other centres and keeping Air India airborne can be a difficult task for the government.

The sources said AI might have to temporarily cancel some more flights due to the pressure from the oil companies to pay up the dues. The cash-starved national carrier has a payment overdue of Rs 3,320 crore to oil companies and other vendors.

A source requesting for anonymity, says, “Air India’s daily ATF bill is up to Rs 18.5 crore and it has dues of about Rs 2,400 crore. Due to high dues AI's credit facility was withdrawn and it was put on cash-and-carry last December. But AI has failed to clear its dues."

“The national carrier has an outstanding unsecured short term working capital loan of Rs 20,763 crore and an annual interest burden of Rs 2,400 crore, at the rate of 12 to 14 percent, which is quite high," the source said.

After putting AI in the cash-and-carry mode, oil marketing PSUs had threatened that they would not provide fuel if their daily bills were not cleared.
 

Comments

 

Other News

How social media is reshaping elections

Since Brazil’s return to direct presidential elections in 1985, no candidate who finished second in the first round of polling had ever won the presidency. Luiz Inácio Lula da Silva, now 81, has just done it. What explains the comeback, and what changed in Brazilian politics to make it possi

Cabinet approves Dearness Allowance, Dearness Relief

The union cabinet chaired by prime minister Narendra Modi on Wednesday approved the release of an additional instalment of Dearness Allowance (DA) to central government employees and Dearness Relief (DR) to pensioners with effect from 01.07.2026 representing an increase of 3% over the existing rates of 6

Cyclone Arnab strikes Andhra as warming oceans amplify storm risks

Cyclone Arnab made landfall along the Andhra Pradesh and Yanam coasts in the early hours of Wednesday as a very severe cyclonic storm, with maximum sustained wind speeds of 125–135 kmph and gusts reaching 150 kmph. Its rapid intensification has raised concerns about how warmer oceans, global warmin

Counting matters but which ones?

The first instinct of public policy is to count. Its harder task is to count what counts. We have become remarkably good at measuring the reach of the welfare state vis-à-vis beneficiaries covered, rupees transferred, houses built, connections installed and services delivered. But some of the most

Inching closer to a trade deal with America

The cooperation between India and the United States goes back quite a time. We need to relegate that era to the backburner when Pandit Jawaharlal Nehru visited US in the times of president Dwight Eisenhower and called the American let-off of 10 million dollars in defence aid to Pakistan as a “gun w

Manch vs Musk: Forty people and a foreign billionaire

About forty people walked the roundabout on Teen Murti Marg to the gate of Chanakyapuri police station, a distance you could cover in under a minute, on Friday to protest against Elon Musk’s Starlink. The walk was called by the Swadeshi Jagaran Manch. Nobody joined them on the way, and nobody seeme

Upcoming Conferences



-->

Archives

Current Issue

Opinion

Facebook Twitter Google Plus Linkedin Subscribe Newsletter

Twitter