Ministry intervention sought to make airlines pay interest

New Delhi: The ministry of petroleum and natural gas wants its civil aviation counterpart to ask airline firms to pay state-owned oil marketers interest on credit to buy jet fuel.
The interest that the three airlines—Jet Airways (India) Ltd, Kingfisher Airlines Ltd and National Aviation Co. of India Ltd (Nacil), which operates Air India—have to pay is around Rs111 crore as on 31 December, said an official of Indian Oil Corp. Ltd (IOC), who declined being named.
The government had eased the immediate financial concerns of the loss-making domestic carriers by allowing them to pay up in six equal instalments the dues amounting to Rs2,962 crore owed to the oil retailers in October.
Nacil, Jet and Kingfisher owed Rs886 crore, Rs1,057 crore and Rs983 crore, respectively, to IOC, Hindustan Petroleum Corp. Ltd (HPCL) and Bharat Petroleum Corp. Ltd (BPCL) at the time of the arrangement. Of the Rs2,962 crore, a payment of Rs2,131 crore was overdue.
“No airline is paying the interest accrued on this outstanding amount. We have taken up the issue with the airlines and even the (oil) ministry has written to the civil aviation ministry. This interest is charged on any delayed payment beyond 90 days,” the IOC executive said.
While Jet owes Rs5 crore, Rs1 crore and Rs5.5 crore to BPCL, HPCL and IOC, respectively, Nacil owes Rs25 crore, Rs4 crore and Rs25 crore to these firms as interest. Kingfisher owes Rs19 crore, Rs20 crore and Rs6 crore to BPCL, HPCL and IOC, respectively.
“Though we have been receiving EMIs (equated monthly instalments) from the other two airlines, Kingfisher has defaulted on payments. Between the three OMCs (oil marketing companies), they (Kingfisher) owe Rs1,000 crore,” the IOC executive said.
04/02/09 Utpal Bhaskar and Tarun Shukla/Livemint

To Read the News in full at Source, Click the Headline

Categories: Indian Aviation- In General Feb 2009