Oil companies restore fuel supply to Air India; airline assures payment of Rs 100 crore per month
In major relief for Air India, oil companies have restored fuel supply at six airports. Sources said that Air India has assured to pay Rs 100 crore per month to oil companies to clear the debt.
The supply at six airports was stopped on August 22. Air India had a meeting with the oil companies and has proposed to pay Rs 100 crore every month of the Rs 4,400 crore debt and it has agreed to pay daily for fuel it is taking for operations.
According to an Indian Oil Corporation official, the decision to resume fuel supply was taken and it resumed on Saturday evening.
Oil companies had threatened to stop fuel supply at Hyderabad and Raipur from September 6 while the supply was stopped at Ranchi, Mohali, Patna, Visakhapatnam, Pune and Cochin before that.
According to the official, until March 31, the airline owed R 4,600 crore for fuel, which had been reduced to R 4,300 crore by July 31.
Air India chairman and managing director Ashwani Lohani admitted last week that the carrier’s financials weren’t sound enough, but said it was hopeful of making an operational profit this year, and was looking to launch new flights, improving its service to first-class passengers and offering special packages to travellers .
Air India, which incurred a loss of Rs.4,000 crore in 2018-19 and is laden with Rs 55,000 crore of debt, has a revenue target of Rs 31,000 crore in this financial year. It is targeting an operational profit of Rs 1,000 crore at the least.