Air India CMD Ashwani Lohani says that it doesn’t reflect on the operational performance.

Fuel supply cut to Air India due to fund crunch to not affect operations says CMD
Money Aviation Monday, August 26, 2019 - 16:59
Written by  S. Mahadevan

The beleaguered public carrier Air India’s CMD has tried to justify various reports the airline has been denied fuel supplies in six airports around the country. He says that this is due to non-payment of fuel bills for over 200 days.

Ashwani Lohani, the CMD of Air India, has issued a statement claiming that this action by the three state-owned oil companies, Indian Oil, Hindustan Petroleum and Bharat Petroleum does not have any bearing on the airlines’ day to day operation nor the plans afoot to revive the organization.

The decision to stop supplying aviation turbine fuel to the aircrafts of Air India and Alliance Air, at Mohali, Patna, Kochi, Vizag, Pune, and Ranchi airports does put the carrier at a great disadvantage and damages its reputation in the process.

Reports indicate that the overall outstanding to all three oil companies has touched the figure of Rs 5,000 crore and some of the bills due for release of payment are as old as 230 days, much beyond the 90-day period agreed on. Indian oil had taken the initiative and addressed the communication to Air India on their decision to suspend further supplies of fuel at these airports. Air India it appears made an offer to clear part of these dues but the amount offered was too meagre for the oil companies to accept and resume supplies.

Air India has a debt burden of Rs 58,000 crore. The government is keen to hive off the company to any private entity interested in taking it over. Ironically this large debt outstanding is the main reason no investor would want to touch Air India. There are other sticking points like an adamant employees’ trade union, which is opposing the privatization of the airline.

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