Bangalore/Mumbai: Vijay Mallya-owned Kingfisher Airlines may see its carriers run out of fuel from Thursday as the oil companies might stop supply to the private carrier.
This is in pursuance to the notice being served to the aviation companies on Tuesday to clear all outstanding dues and pay interest on it beyond the credit period, failing which supplies would be discontinued from February 4.
The oil companies have written to the National Aviation Company Ltd (Nacil) and the two private carriers -- Jet Airways and Kingfisher Airlines --to pay their dues by midnight or the airlines would be put on cash & carry from Thursday.
An industry source said though Jet has given "some commitment", Kingfisher has not officially communicated on how it would be paying. Therefore, supplies to Kingfisher Airlines could be cut from Thursday midnight.
However, a Kingfisher statement said: "On October 22, a joint meeting was held between OMC representatives and airline chiefs, where minister of civil aviation and the minister for petroleum and natural gas were present. The minutes of this meeting do not make any mention of the payment of interest on outstanding dues."
"We have sought a clarification from the ministry of petroleum and natural gas in this regard."
A senior official from one of the oil companies said the ministry has already addressed the issues raised by the airlines and has already sent a clarification.
"We have still not got any confirmation on the payment of interest by the airlines. If they do not give any commitment by tonight, we will take some action tomorrow," said a senior IOC executive, who did not wish to be named.
An official from another oil company concurred, saying all three full-service airlines have delineated from agreed commercial terms.
"Even though Nacil has not given any commitment on payment of dues and interest, being a state-owned company, a government directive might change our action plan against them," this official said.
The total cumulative amount of outstanding dues of all the airlines towards the three oil companies stood at Rs 3,774 crore as on October 22.
An industry source indicated that HPCL might not take any action against Jet as the airline had cleared all dues.
Ragini Chopra, spokesperson of Jet, said while all outstanding payments were made to HPCL, there still has to be discussion between the airlines and OMC on the terms of interest payment.
"We have no clarity on that," she said.
On October 22, the airline chiefs reached a consensus with the OMC representatives and the oil and the petroleum ministry to pay back the dues in six installments starting October 2008. The airlines were also required to give a bank guarantee in lieu of the oil companies extending the credit period from 60 days to 90 days.
"While some part installments were received from them, much below the decided monthly installment, none of them paid the interest on the dues. As a result, the companies had to take a firm stand," the source said.
The total ATF supply from the oil companies currently stands at over one lakh kilolitre per month of which 60% is domestic and 40% is international. Smaller and no-frills players have been regularly paying their dues as their demand is also very less.


