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

Flights to resume as oil companies arrive at settlement


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 Due to high dues AI's credit facility was withdrawn and it was put on cash-and-carry last December.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.



Other News

Thackeray launches three fast-track DNA units under Nirbhaya scheme

Maharashtra chief minister Uddhav Thackeray has launched three state-of-the-art human DNA units under the Nirbhaya Scheme for efficiency in criminal investigations. A wildlife DNA unit in Nagpur makes Maharashtra the country’s first state to have a forensic testing lab for animals.  

How foreign policy has been Modi’s focus right from the start

The Midway Battle: Modi’s Roller-coaster Second Term By Gautam Chintamani Bloomsbury / 400 pages / Rs 699 Gautam Chintamani, a film historian and author, has penned an in-depth chronicle of prime minister Narendra Modi’s second

Remove unauthorized constructions without pressure: Thackeray to BMC

Maharashtra chief minister Uddhav Thackeray has instructed the Mumbai civic authorities to take immediate action on unauthorized constructions on war footing. In a virtual meeting held on Wednesday, Thackeray said no illegal construction will be tolerated in Mumbai and called upon the BMC to

Covid norms relaxed; Mumbai restaurants, shops to remain open longer

After extending timings of shops and restaurants as well as the reopening of cinema halls and theatres under specified SOPs from October 22, in view of the festive cheer, the Maharashtra government has allowed restaurants and eateries to remain open till 12AM and shops and establishments to function till 1

Global Hunger Index data collection flawed: Arvind Panagariya

Rubbishing the recently released Global Hunger Index 2021, wherein India has slipped to 101 position to be placed below Pakistan, Nepal and Bangladesh, Arvind Panagariya, professor of economics at Columbia University and former vice chairman, NITI Aayog, has said that data collection and methodologies used

‘Blue Zones’ concept of healthy living and its relevance in India

A long life span free from diseases and disability, the so-called healthy aging, has been a matter of prime interest to humanity. It is widely held that the life expectancy is a function of interplay between various genetic and environmental factors. There is scientific evidence to support the fact that on

Visionary Talk with Dr Arvind Panagariya, Professor, Columbia University & Former VC, NITI Aayog


Current Issue


Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter