AI to combine 13 flights to tackle fresh financial crisis

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New Delhi, May 29: Faced with a twin attack from oil PSUs and operators of Delhi and Hyderabad airports asking it to clear their dues, Air India on Saturday, May 28 drew up plans to combine 13 flights spread over a few sectors till the start of the lean season from mid-June.

In a bid to face the fresh financial crisis, the ailing national carrier sent a letter to the Civil Aviation Ministry urging the government to clear an estimated Rs 1,150 crore worth of dues on account of VVIP movements and evacuation flights including those to Libya.

It also wanted the government to take an expeditious decision on releasing Rs 1,200 crore worth of equity infusion, the provision for which has been made in the 2011-12 budget.

This would enable the national carrier to face the crisis which has started adversely hitting its operations, sources said.

Three oil PSUs -- Indian Oil Corporation, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation, decided to slash supply of about 500 kilolitres of jet fuel per day to the airline, sources said.

To meet this situation, Air India has decided to fill the tanks of its aircraft from Dubai, London, Paris, Frankfurt and Bangkok where the prices are much cheaper than in India.

According to latest figures, Air India owes a total of Rs 2,250 crore to the three oil PSUs. The airline''s daily fuel bill was Rs 13.5 crore in December when the oil firms stopped the credit line. It has now risen to Rs 18.5 crore due to the global crude price hike -- from USD 70 to USD 120 a barrel.

To meet the fuel restrictions, the airline decided to curtail 13 of its services by combining flights on certain sectors, including Delhi-Mumbai and Chhattisgarh, they said.

During the lean season from June 15 till September, number of flights would in any case be curtailed due to low traffic and, therefore, there would be less fuel uplift.

Air India, which cancelled six flights yesterday, did not cancel any flight today, they said.

The oil PSUs and airline have reached an understanding that ATF supply would not be curtailed at all airports but at select major metros to give the airline the leeway to combine flights and adjust its loads and daily flight schedules.

On top of this crisis, the GMR-led Delhi International Airport Limited (DIAL) and GMR Hyderabad International Airport Limited (GHIAL) have also stopped their credit line and asked the national carrier to pay the landing, parking and navigation charges upfront or face restrictions on these services from June one.

Air India owes Rs 217.08 crore to DIAL and Rs 35.89 crore to GHIAL on account of these airport charges.

DIAL and GHIAL have also placed similar restrictions on Kingfisher Airlines which owes Rs 67.98 crore and Rs 21.98 crore respectively to DIAL and GHIAL.

The airport operators said Air India and Kingfisher would be allowed to operate their flights "only on cash and carry basis" from midnight of June one and had "significant amount of dues".


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