New Delhi, Aug. 18: Air India can now purchase fuel on two-to-three-months’ credit, instead of paying for it on a daily basis.
The troubled national carrier had been put on a cash-and-carry mode by public sector oil companies since December as it owes more than Rs 2,000 crore to them. Air India has been paying Rs 16.5 crore a day to lift aviation turbine fuel for its daily operations.
The decision to provide the credit was taken by a group of ministers (GoM), headed by finance minister Pranab Mukherjee.
The GoM also reviewed the financial and operational performance of the ailing carrier, civil aviation minister Vayalar Ravi said.
“Instead of cash and carry, Air India will from now on make payments on the basis of this credit limit of two to three months. So, the tension of making daily payments is now over,” said Ravi.
The meeting of the GoM was attended by petroleum minister S. Jaipal Reddy, home minister P. Chidambaram, deputy chairman of Planning Commission Montek Singh Ahluwalia and civil aviation secretary S. Nasim Zaidi. It was also the first meeting of the GoM to be attended by the newly appointed CMD of Air India — Rohit Nandan.
The national carrier has outstanding liabilities of more than Rs 67,000 crore, of which Rs 21,200 crore is working capital loan, Rs 22,000 crore is long-term loan on fleet acquisition, Rs 4,600 crore are vendor dues and Rs 20,320 crore is accumulated loss.
“A sub-committee of the finance ministry will submit a report on the turnaround and financial restructuring plan next month. The GoM will meet again in mid-September. All attempts to strengthen Air India with some financial support to improve its cash flow will be made by the government,” Ravi said.
The government will soon come out with measures for maximum utilisation of those aircraft which are flying for lesser hours, said V. Narayanasamy, minister of state in the PMO.
Narayanasamy said that 17 aircraft had been grounded because of their poor condition.
Source: http://www.telegraphindia.com
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