Kingfisher is top defaulter on fuel dues

New Delhi/Mumbai: On Tuesday, the last day of the fiscal year gone by and the deadline for closing out dues to state-run oil firms who supply it jet fuel, Kingfisher Airlines Ltd, India’s largest carrier by passengers flown, missed making good the payments, ending fiscal 2009 with around Rs1,000 crore in arrears.
Airlines such as National Aviation Co. of India Ltd-run Air India and Jet Airways (India) Ltd, too, have missed some payments due to oil firms, but have dues much less than their bigger rival, said two executives at Indian Oil Corp. Ltd (IOC).
“There are some delays and defaults by different airlines. They have agreed to pay in April on different dates. While some have paid, Kingfisher did not pay us anything after their last payment. They have written to us recently asking us for an extension till 10 April,” said a senior IOC executive, who asked not to be identified.
Separately, Kingfisher Airlines also missed paying Airports Authority of India (AAI) dues of at least Rs150 crore over use of the airports run by the regulator, a senior government official said. The airline was to make this payment to bring its dues with limits of its bank guarantees furnished to AAI.
As the consequence of missing the deadline for oil dues, Bharat Petroleum Corp. Ltd (BPCL) has stopped selling jet fuel to Kingfisher Airlines on credit and instead moved to a so-called cash and carry arrangement, joining IOC in adopting a no-credit stance with the carrier, chaired and run by flamboyant millionaire Vijay Mallya.
The 31 March cut-off date was the sixth and last in a series of deadlines set out on 22 October, when the Union government allowed the country’s three largest carriers—Air India, Jet Airways and Kingfisher Airlines—to pay dues amounting to Rs2,962 crore over a period of six months to oil marketing firms.
The dues had accumulated and piled up, mostly in the first three quarters of 2008, as jet fuel prices scaled record highs through the year and peaked in August.
The staggered payment option was extended to the airlines, who had reported losses of a cumulative Rs2,888.13 crore in fiscal 2008. The deal, put together in the presence of oil minister Murli Deora and aviation minister Praful Patel, included fortnightly reviews of jet fuel prices instead of a monthly revision earlier, and offering a credit period of up to three months to help keep the airlines afloat.
But as the fiscal year came to an end, Kingfisher Airlines had not met its commitment, said a second IOC executive, who too asked not to be identified, even as Air India and Jet Airways had paid most of their dues by 31 March. It was not immediately clear how much these two carriers owed the firms.
03/04/09 Tarun Shukla, Utpal Bhaskar and P.R. Sanjai/Livemint

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Categories: Jet Airways Apr 2009, Kingfisher Apr 2009, NACIL Apr 2009