Airlines, oil PSUs in fresh row

New Delhi: Less than a month after getting a reprieve from the government on their fuel bills, private carriers have got embroiled in a fresh dispute with state-owned oil marketing firms. The carriers are refusing to provide a collateral for the extra 30 days credit period granted by the oil ministry, even as they have so far failed to pay the first instalment of past dues, the deadline for which ends on Sunday.
After the carriers ran up dues of of Rs 2,926 crore, out of which Rs 2,131 crore was beyond the 60-day credit period, the government stepped in to end the impasse on October 22. At a meeting called by oil minister Murli Deora, which was attended by civil aviation minister Praful Patel, the credit period to airlines was extended by 30 days to 90 days for fuel that was to be sold thereafter. The commercial terms were to be worked out between the companies.
For past dues, it was decided that the carriers will clear the outstandings in six equal instalments which they will pay every 26th day from the day of the meeting. On the day of the meeting, Naresh Goel's Jet Airways had an outstanding of Rs 1,576 crore, out of which Rs 321 crore was beyond credit limit. Industrialist Vijay Mallya's Kingfisher Airlines owed Rs 983 crore, of which Rs 924 crore was beyond the credit period. Government's own National Aviation Company of India Ltd, which flies under Air India brand and did not have any credit period, had an outstanding of Rs 886 crore.
Even as the deadline for the first instalment looms, the carriers are refusing to give collateral such as a bank guarantee or a post-dated cheque to cover the fuel sales in the 30 days of extra credit period. The airlines are taking the plea that no such mechanism was discussed at Deora-Patel's meeting.
15/11/08 Sanjay Dutta/Times of India

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Categories: Indian Aviation- In General Nov 2008