Mumbai: With Air India owing them more than ₹5,000 crore in outstanding dues, State-owned oil marketing companies (OMCs) are finding it tough to keep refuelling the carrier.
OMCs provide 90 days’ unsecured credit to the national carrier, compared with secured credit backed by bank guarantees for other private airlines.
However, Air India has not paid the OMCs for eight months against its credit period of 90-days, accumulating dues of over ₹5,000 crore to the OMCs.
Asked for comments, IOCL chairman Sanjiv Singh said, “The commercial conditions differ slightly from airline to airline. Air India, being a public sector [firm], we provide them unsecured credit. For Jet Airways, we provided secured credit. Today, even if Jet is not operational, we have no outstanding dues against the airline. For other airlines, the outstanding is not abnormal and nothing to worry. But for Air India, the dues with interest is over ₹2,900 crore and is increasing. That’s why we are little worried about Air India’s outstanding and we find it difficult to support this.”
IOCL itself has a net borrowing of over ₹75,000 crore.
Asked till what point IOCL can continue to refuel Air India, Mr. Singh said, ”It’s a big call. When I am looking from Indian Oil’s point of view... it’s not only business alone, it’s commitment beyond business.
10/09/19 The Hindu
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OMCs provide 90 days’ unsecured credit to the national carrier, compared with secured credit backed by bank guarantees for other private airlines.
However, Air India has not paid the OMCs for eight months against its credit period of 90-days, accumulating dues of over ₹5,000 crore to the OMCs.
Asked for comments, IOCL chairman Sanjiv Singh said, “The commercial conditions differ slightly from airline to airline. Air India, being a public sector [firm], we provide them unsecured credit. For Jet Airways, we provided secured credit. Today, even if Jet is not operational, we have no outstanding dues against the airline. For other airlines, the outstanding is not abnormal and nothing to worry. But for Air India, the dues with interest is over ₹2,900 crore and is increasing. That’s why we are little worried about Air India’s outstanding and we find it difficult to support this.”
IOCL itself has a net borrowing of over ₹75,000 crore.
Asked till what point IOCL can continue to refuel Air India, Mr. Singh said, ”It’s a big call. When I am looking from Indian Oil’s point of view... it’s not only business alone, it’s commitment beyond business.
10/09/19 The Hindu
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