Premium
This is an archive article published on May 28, 2011

AI to combine 13 flights to tackle financial crisis

It wanted the govt to take an expeditious decision on releasing Rs 1,200 cr worth of equity infusion.

Faced with a twin attack from oil PSUs and operators of Delhi and Hyderabad airports asking it to clear their dues,Air India today 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.

Story continues below this ad

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.

Story continues below this ad

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.

Latest Comment
Post Comment
Read Comments
Advertisement
Advertisement
Advertisement
Advertisement