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Airlines

Air India Faces Fuel Shortage Crisis Amid Debt Owed to Oil Firms

Strategic Insights

— 1 min read

Air India was forced to cancel six flights on Friday due to a fuel shortage, as state-owned oil firms refused to supply jet fuel until the airline paid off its mounting debts. The Indian Oil Corporation, Bharat Petroleum Corporation Limited, and Hindustan Petroleum Corporation had previously notified Air India to switch to a cash-and-carry sales model in December, citing unpaid fuel bills of over Rs 2,400 crore. The airline operates nearly 320 flights daily, and its crew on international flights have been instructed to purchase extra fuel for their return journeys.

Key Takeaways:

  • Air India has accumulated debts of over Rs 2,400 crore in unpaid fuel bills to Indian Oil Corporation, Bharat Petroleum Corporation Limited, and Hindustan Petroleum Corporation.
  • The oil firms have notified Air India to switch to a cash-and-carry sales model, requiring the airline to pay upfront for fuel purchases.
  • Air India operates nearly 320 flights daily, with six flights canceled on Friday due to fuel shortage.
  • The airline has raised the issue with the civil aviation ministry, which has held at least two rounds of discussions with officials from Air India and the oil PSUs since March.
  • Air India has averaged paying Rs 13.5 crore daily for fuel purchases over the past few months, which has now increased due to the fuel price hike.
  • The airline's crew on international flights have been instructed to purchase extra fuel for their return journeys.

Statistics:

  • Air India has accumulated debts of over Rs 2,400 crore in unpaid fuel bills.
  • The airline operates nearly 320 flights daily.
  • Air India has averaged paying Rs 13.5 crore daily for fuel purchases over the past few months.
  • The fuel price hike has resulted in an increase in Air India's daily fuel costs.
  • At least six Air India flights were canceled on Friday due to fuel shortage.

Sources:

  • "Air India foiled by fuel shortage, at least 6 flights cancelled" by Hindustan Times, published in the Hindustan Times.

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