Airlines owe oil companies Rs1,800 crore

New Delhi / Hyderabad: The country’s bleeding airline firms such as Jet Airways (India) Ltd, Kingfisher Airlines Ltd and National Aviation Co. of India Ltd (Nacil) owe the country’s oil firms, themselves suffering losses on account of retailing fuel at government mandated rates, at least Rs1,800 crore.
This number is the amount owed by the airlines in excess of their credit limits with the oil companies. “The airlines should have honoured the credit limit, but some airlines are not honouring it,” Murli Deora, Union minister for petroleum and natural gas, said.
Union oil secretary R.S. Pandey named the three airlines as defaulters on Thursday. The country’s airlines are suffering significant losses on account of higher fuel prices and lower passenger traffic. Aggregate losses are expected to touch $2 billion (Rs9,780 crore) this year.
Two of the airlines, Jet and Kingfisher announced an alliance on Tuesday that would rationalize routes, workforce and costs for both.
Of the total amount owed by the airlines, 60% has to be paid to Indian Oil Corp. Ltd (IOC) and the balance to Hindustan Petroleum Corp. Ltd and Bharat Petroleum Corp. Ltd.
A Jet executive, who did not want to be named, admitted that the airline owed Rs850 crore for fuel purchases.
A spokesperson for Kingfisher Airlines said the airline did not want to disclose the amount it owed towards fuel purchases and said the airline was “in compliance with the settlement terms made between oil marketing companies as agreed (to) time to time”.
Jitendra Bhargava, Nacil’s executive director for corporate communications, declined comment on the subject.
16/10/08 Utpal Bhaskar and P.R. Sanjai/Livemint

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Categories: Jet Airways Oct 2008, Kingfisher Oct 2008, NACIL Oct 2008