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Air India’s problems rise as firms ‘threaten’ to down fuel supply at Hyderabad & Raipur too

Hindustan Times, Delhi | By
Sep 01, 2019 11:19 AM IST

Air India is in the grip of a major financial crunch and on August 22, Indian Oil Corporation stopped fuel supply to the airline at Ranchi, Mohali, Patna, Vizag, Pune and Cochin airports, owing to nonpayment of dues.

Air India’s fueling woes are likely to grow further as the oil companies have threatened to stop fueling the airline at two more airports, despite an assurance of payment from the ministry of civil aviation, sources in the ministry said.

Air India is in the grip of a major financial crunch and on August 22, Indian Oil Corporation stopped fuel supply to the airline at Ranchi, Mohali, Patna, Vizag, Pune and Cochin airports, owing to nonpayment of dues.

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The oil companies have now threatened to stop fuel supply at Hyderabad and Raipur from first week of September, which will affect the flight movements severely.

“We have been managing till now though flights of Alliance Air, a subsidiary of Air India were affected. We were managing by carrying extra fuel while operating to these destinations. But if fuel supply are stopped at other airports as well, we would have to start cancelling flights,” said an Air India official, requesting anonymity.

According to the official, till March 31 this year, the total due was 4600 crore, which has been reduced to R 4300 crore by July 31. Currently, the payment is being made on a daily basis.

Civil aviation minister Hardeep Puri on Friday had said that the government was determined to privatise Air India and will not fail in its sale this time. The minister also said that government will give letter of comfort to the oil companies to resume fuel supply to Air India at six airports.

The chairman and managing director of Air India, Ashwani Lohani, admitted that financials of the airline have not been very good, however loss in operational revenue had reduced and the national carrier is looking at decent operational profit this year.

“We are the airline, which has perception issue. Load factor has also increased to 82% and we should post hefty operational profit this year. We have legacy issues, issues related to merger, some we have solved while some are insolvable. But despite trouble, we are looking at launching new flights, improving first class, promote tourism and offering special packages,” Lohani said.

The airline has prepared a revenue plan for 2019-20 after incurring a loss of about 4,000 crore in 2018-19; it already has 55,000 crore of debt on its books. With a revenue target of 31,000 crore this financial year, the national carrier is targeting an operational profit of 1000 crore at the least.

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