Air India runs out of fuel, cancels 10 flights

The cash crunch faced by the national carrier, Air India (AI), has cancelled 10 flights on Friday morning as the oil companies refused to refuel the aircraft unless the airline paid them cash on the spot for the day’s fuel. However, by afternoon, the matter was resolved as the airline deposited post-dated cheques with the companies and there were no more cancellations.   

Passengers booked on AI flights suffered as a result of the cancellations. “Three  flights from Mumbai to Hyderabad, Bangalore and Chennai and two from Delhi to Tokyo and London were cancelled,” said an AI official. Moreover, five flights from south India were cancelled. The passengers booked on these aircraft were accommodated on other airlines.  

“A couple of flights were cancelled. But the issue has been resolved and operations have normalised,” said Kamaljeet Rattan, spokesperson for AI. The airline operates 320 flights daily and its daily fuel bill is Rs16 crore.

The AI was not able to clear a backlog of Rs2,400 crore for one year. It owed the amount to three oil companies — Bharat Petroleum Corporation Limited, Indian Oil Corporation and Hindustan Petroleum Corporation. Since December, AI has been operating on cash-and-carry mode and pays Rs13.5 crore daily to oil companies.     

The airline had alleged that that the government of India owed AI Rs450 crore for its services. While the prime minister’s office owed Rs344 crore for VVIP operations, the ministry of defence and external affairs owed dues up to Rs106 crore for evacuation operations of Indians from Libya. “After the government pays AI the amount, it will be able to clear some of its debts,” said the official.

Meanwhile, Delhi International Airport (P) Ltd. (DIAL) and GMR Hyderabad International Airport Limited (GHIAL) have announced that from June 1, Kingfisher  airlines (KFA) and Air India will be allowed to operate their flights from and into Delhi and Hyderabad, only on cash and carry basis. “This is to control the significant amount of dues recoverable from the two airlines. The managements of both these airports have had to take this decision after continued deliberations with these airlines failed to yield payments of outstanding dues,” said a statement from the airport operators.