Pay for fuel or face cut in supply, Reddy tells AI

New Delhi: Petroleum minister Jaipal Reddy has written to the civil aviation minister Vyalar Ravi asking that Air India make a minimum daily payment of R16.5 crore for aviation turbine fuel (ATF) supplied by public sector oil marketing companies.
Reddy has said that if Air India fails to make this minimum payment on daily basis then from next month the oil cos would not supply ATF on credit . The move is expected to add to the woes of already stretched finances of the national carrier.
According to official sources, Air India is currently lifting ATF worth R18.5 crore daily but paying only R13.5 crore due to severe cash crunch. The airline owes a total of R2,400 crore to the oil companies
“The petroleum minister has stated that the airline needs to pay higher than what it is currently paying as oil marketing companies (OMCs) have their own constraints,” official sources told FE.
27/04/11 Nirbhay Kumar/Financial Express

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Categories: Air India Apr 2011