Air India group fuel supply remains cut at some airports, aviation ministry in a huddle

NEW DELHI: For the second day running on Friday, Air India group is not getting aviation turbine fuel (ATF) at six airports — Kochi, Pune, Patna, Ranchi, Vizag and Mohali. The debt-ridden airline group which comprises of AI, Alliance Air and AI Express owes about Rs 3,000 crore to oil marketing companies (OMCs).
“We have been making payment for daily uplift of jet fuel as our performance is much better now.While OMCs know clearing of dues will happen when equity infusion from government comes, they asked us to keep paying some lump sum towards diluting those dues. We paid Rs 100 crore some time back. On Thursday when they cut fuel supply at six airports, we paid Rs 60 crore. Still the supply has not resumed at those airports till now,” said a senior AI official.
An AI spokesman said: “Air India flights are not affected. Alliance Air flights at places like Cochin, Agatti, Mysore, Hyderabad, Pune, Goa, Ranchi, Raipur, Bhubaneswar, Kolkata, Chandigarh and Kullu are affected due to discontinuing of fuel supply.” Alliance Air is the regional arm of AI and comments have been sought from it.
The aviation ministry is holding meeting with AI officials on Friday morning to see how the airline can be kept airborne despite almost running out of funds. The attempt will be to get some emergency working capital from the government. Current aviation secretary P S Kharola was chairman of AI earlier and is well aware of the airline's financial position.
AI officials say the airline has not got any equity support — barring Rs 1 lakh given to the airline in this budget. “Our financial condition is well known. If we do not get equity, how can we pay?” said an official.
The government is going to begin the process of selling off AI. “Our operational performance has improved tremendously and we pay for daily uplift of fuel. Yes there are dues, loans which are not a secret. But disconnecting fuel at a time when we are doing well operationally only mars our prospects of getting sold off successfully and is baffling,” said a source.
AI has sought immediate emergency funding of about Rs 2,500 crore from the government as debt. This fiscal the divestment-bound airline, which has accumulated debt-cum-liabilities of almost Rs 60,000 crore, is now finding it hard to meet working expenses. “Last October the government had approved giving AI sovereign guarantee to enable it to raise Rs 7,600 crore. We raised about Rs 5,000 crore as debt. Now guarantee of Rs 2,464 crore is remaining and we have been requesting the government to give us those funds as debt,” said an official.