Three state-owned oil companies have refused to provide fuel to Air India (AI, Delhi International) at six airports due to the non-payments of debts by the flag carrier.
"The joint decision to stop fuel supply to Air India from six airports, i.e., Kochi International, Pune, Patna, Ranchi, Vishakhapatnam, and Chandigarh, was taken by the oil marketing companies in the wake of long overdue payments to the tune of INR50 billion rupees (USD700 million). This includes the interest accrued on the outstanding dues," Indian Oil said in a statement.
Indian Oil, Bharat Petroleum, and Hindustan Petroleum have vowed not to expand the action to more airports despite the scale of the debt.
"Our idea is not to cause inconvenience but claim our dues that run very high at the moment. Air India had been buying time for the past six months on some pretext or the other such as elections, parliament sessions etc. But we are not in a position to give any more extension now," a source at one of the fuel suppliers told The Mint.
The companies tentatively gave Air India until August 26 to clear its debt or present a resolution plan, although they did not specify the sanction should the flag carrier fail to do so.
Air India said that the only flight cancelled as a result of the oil suppliers' decision was a service from Kochi to Agatti Island operated on behalf of Air India by its subsidiary Alliance Air (India) (9I, Delhi International). Other flights operated with reduced payload or made unscheduled technical stops for refuelling.
Indian Oil already threatened Air India with a refusal to refuel in July 2019 although eventually, the two parties reached an agreement after an intervention by the government.
A source at Air India anonymously said that the carrier would not be able to repay the entire debt and has offered to repay INR600 million rupees (USD8.4 million) at this stage.
