Air India’s fuel credit limit extended: RaviAugust 18th, 2011 - 11:25 pm ICT by IANS
New Delhi, Aug 17 (IANS) The group of ministers (GoM) looking into the troubled financial condition of national carrier Air India Thursday said that the airline’s credit limit by the state-run oil marketing companies (OMCs) has been extended by two to three months.
“Now instead of cash and carry, Air India has been given two to three months credit extension by OMCs,” Civil Aviation Minister Vayalar Ravi told reporters after a meeting here of the GoM, headed by Finance Minister Pranab Mukherjee.
According to Ravi, the assurance for extending the credit limit to buy jet fuel from the OMCs was given by Petroleum Minister S. Jaipal Reddy.
Earlier the state-run OMCs had put the flag carrier on a cash and carry basis — which basically meant that the airline would have to pay every time it bought fuel from these companies.
Currently the airline owes Rs.2,300 crore to the OMCs, from whom it buys Rs.17 crore of fuel daily.
The company’s inability to pay the dues and rising ATF prices had forced OMCs to cut fuel supply to the airline in May end, forcing Air India and its low-cost international subsidiary Air India Express to cancel 147 flights from May 27 to June 2.
The company incurred losses worth Rs.10 crore for the flight cancellation.
On the airline’s turn-around and financial restructuring plan (TAP), Ravi said that the review process by the sub-committee would be completed in a month’s time.
“The TAP’s review report by the sub-committee would be given in a month’s time,” he added.
Ravi added that the next meeting of the GoM would take place in mid-September.
Currently Air India’s cumulative losses amounted to Rs.22,165 crore apart from a Rs.22,000 crore debt burdened to buy new aircraft.
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Tags: air india, air india express, carrier air, civil aviation, crore, finance minister, financial restructuring, flag carrier, fuel credit, fuel supply, international subsidiary, jaipal reddy, jet fuel, marketing companies, national carrier, new aircraft, New Delhi, omcs, pranab mukherjee, vayalar ravi