Oil companies threaten to extend fuel ban on Air India to two more cities; flight operations to get impacted

NEW DELHI: Passengers booked on Air India may not be able to complete their flights with oil companies threatening to expand their fuel supply ban on the national carrier to two more airports.

Sources said that the oil companies have written to the airline saying that they will expand their fuel supply ban to Raipur and Hyderabad airports too from September 5.

The oil companies are not supplying fuel to Air India at six airports that are Patna, Ranchi, Pune, Mohali, Vizag and Kochi.

“We are going to cancel our flights out of Vizag because it is becoming unsustainable for us to continue with our flights with the ban,” said a senior Air India official, who did not want to be identified.

He added that Air India is on cash and carry with oil companies and is paying RS 18 crore to them everyday.

Through extra payments, we have also reduced our dues from RS 4,600 crore at the end of August 31, 2019, to RS 4,300 crore by the end of July.

The government has not issued any equity for Air India, as it plans to sell 100% in the national carrier. The government has, however, take over a debt of Rs 29,000 crore from the airline in an attempt to prepare it for divestment.

The debt reduction is set to reduce the airline’s interest payment outlay of the airline by Rs 2,700 crore from Rs 4400 crore.


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