Oil cos’ ultimatum to airlines on dues

Mumbai/Mangalore: Indian Oil, Hindustan Petroleum Corporation and Bharat Petroleum Corporation have intimated airline companies that they have two weeks to settle their dues for aviation turbine fuel (ATF), failing which future supplies will be terminated.
While the total ATF outstandings are not known, what emerges clearly is that the oil majors are in no mood to be lenient especially when they are burdened with debt in excess of Rs 100,000 crore.
What could have also raised their hackles is that while they passed on the benefits of lower ATF prices to the airlines in the last two months, the latter have not cut fares proportionately.
Efforts to reach Vijay Mallya, Kingfisher Airlines’ chairman, proved futile.
Jet Airways confirmed receiving the letter from all the three oil companies, asking for clearance of dues.
K G Vishwanath, Jet Airways’ senior general manager of finance, said, “We have a credit period of 60 days. Most of the other carriers are already on cash and carry but even then there have been defaults.”
Kishor Gupta, director-finance, SpiceJet, says the airline has not given any bank guarantees, so gives post-dated cheques for delivery of ATF.
08/10/08 Murali Gopalan, Nirmal John & Praveena Sharma/Daily News & Analysis

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Categories: Indian Aviation- In General Oct 2008