State-owned oil marketing companies have restricted aviation fuel supply to Air India at Kochi, Pune, Patna, Ranchi, Mohali and Visakhapatnam due to non-payment of dues
Air India flight AI 933 to Dubai from Kochi was held up for about four hours at Kochi International airport on Monday due to a standoff between the national carrier and state-owned oil marketing companies over its ongoing payment issues.
The Dubai-bound Air India flight, which was scheduled for take-off at 9.15am (local time), finally left Kochi International airport at around 1pm, after a senior Congress politician intervened in the matter and resolved the issue after taking it up with the relevant ministers.
Air India officials at Kochi International airport told Arabian Business said the airline's operations department at Delhi failed to properly brief the flight captain.
“Because of the suspension of fuel supply to Air India by oil marketing companies at Kochi and 5 other cities, our flights uplift enough fuel from Delhi for their onward journey to Dubai and other destinations via Kochi. On Monday, the captain of AI 933 (Kochi-Dubai flight) was not briefed on this, and hence the flight did not uplift enough fuel to fly to Dubai from Delhi, after the stopover at Kochi,” the Air India official said, on condition of anonymity.
AI 933, which had about 300 passengers on board, was refuelled at Kochi airport after Air India issued a payment for it, the official said.
Air India’s Dubai flight from Kochi on Tuesday departed at scheduled time (9.15 am).
State-owned oil marketing companies - Indian Oil Corp (IOCL), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) - have restricted aviation fuel supply to Air India at Cochin, Pune, Patna, Ranchi, Mohali, and Visakhapatnam due to non- payment of dues since August 22.
Officials in the oil marketing companies said they would lift restrictions on aviation fuel supply to Air India in six tier-two cities only after Air India provides a written commitment on payment.
Air India owes around $700 million in payment arrears to the 3 oil companies.
"The situation is still the same. The oil marketing companies (OMCs) are not supplying fuel to Air India at six airports. The OMCs have been told that the national carrier will respond to them in a written communication explaining its payment plans," Mint has reported, quoting an OMC official.
"We are waiting for communication from them before we decide on the next course of action," said the senior official from an oil marketing company.
"We have given a lot of extension to the national carrier in the past few months, and are not in a position to give another one now."
Air India is currently facing a serious financial crunch due to the finance ministry’s decision not to extend any financial support to the debt-ridden carrier in the current fiscal period.
“In the absence of equity support, Air India cannot handle its huge debt liabilities,” an Air India spokesperson said in a statement to Arabian Business.
"Our financial performance in this fiscal, however, is very good and we are moving towards a healthy operating profit."
The Indian government is also moving ahead with its plans to privatise Air India, for which bids are expected to be invited by October this year.
The privatisation of Air India has also affected its profit-making sister airline Air India Express, which had to put on hold its ambitious expansion plans in the Middle East sector due to this disinvestment move.