Fuel supplies restored to debt-ridden Air India

Fuel supplies were suspended on August 22 amid reports that the national flag carrier owed three state-run oil firms more than 45 billion rupees ($630 million). (File/AFP)
Updated 08 September 2019

Fuel supplies restored to debt-ridden Air India

  • The Indian government in 2018 shelved plans to sell a 76 percent stake in Air India after failing to attract any bidders
  • The airline, founded in 1932, was once the country’s monopoly airline, known affectionately as the “Maharaja of the skies.”

NEW DELHI: Fuel supplies have been restored to debt-ridden Air India at six airports following government-mediated talks, after a two-and-half-week suspension by oil companies over the late payment of dues, local media reported.

Fuel supplies were suspended on August 22 amid reports that the national flag carrier owed three state-run oil firms more than 45 billion rupees ($630 million).

Following the talks, Air India agreed to pay them one billion rupees a month to clear the debt, an airline spokesman told the Press Trust of India late Saturday.

A spokesman for the oil firms said “supplies to Air India resumed from Saturday evening.” The airline had continued to fly from the six locations — Pune, Ranchi, Patna, Mohali, Kochi and Vishakhapatnam — by looking at alternative routes and filling up on fuel elsewhere.

The Indian government in 2018 shelved plans to sell a 76 percent stake in Air India after failing to attract any bidders.

The airline, founded in 1932, was once the country’s monopoly airline, known affectionately as the “Maharaja of the skies.”

But it has been haemorrhaging money for years and it has lost market share to low-cost rivals in one of the world’s fastest-growing airline markets.

Successive governments had spent billions of dollars to keep it flying before Prime Minister Narendra Modi’s cabinet last year gave the go-ahead for a sell-off.


Oil prices surge after attacks hit Saudi output

Updated 1 min 46 sec ago

Oil prices surge after attacks hit Saudi output

  • The Houthi attacks hit two Aramco sites and effectively shut down six percent of the global oil supply
  • President Donald Trump said Sunday the US was ‘locked and loaded’ to respond to the attacks

HONG KONG: Oil prices saw a record surge Monday after attacks on two Saudi facilities slashed output in the world’s top producer by half, fueling fresh geopolitical fears as Donald Trump blamed Iran and raised the possibility of a military strike on the country.
Brent futures surged $12 in the first few minutes of business — the most in dollar terms since they were launched in 1988 and representing a jump of nearly 20 percent — while WTI jumped more than $8, or 15 percent.
Both contracts pared the gains but were both still more than 10 percent up.
The attack by Tehran-backed Houthi militia in neighboring Yemen, where a Saudi-led coalition is bogged down in a five-year war, hit two sites owned by state-run giant Aramco and effectively shut down six percent of the global oil supply.
Trump said Sunday the US was “locked and loaded” to respond to the attack, while Secretary of State Mike Pompeo said: “The United States will work with our partners and allies to ensure that energy markets remain well supplied and Iran is held accountable for its aggression.”
Tehran denies the accusations but the news revived fears of a conflict in the tinderbox Middle East after a series of attacks on oil tankers earlier this year that were also blamed on Iran.
“Tensions in the Middle East are rising quickly, meaning this story will continue to reverberate this week even after the knee-jerk panic in oil markets this morning,” said Jeffrey Halley, senior market analyst at OANDA.
Trump authorized the release of US supplies from its Strategic Petroleum Reserve, while Aramco said more than half of the five million barrels of production lost will be restored by tomorrow.
But the strikes raise concerns about the security of supplies from the world’s biggest producer.
Oil prices had dropped last week after news that Trump had fired his anti-Iran hawkish national security adviser John Bolton, which was seen as paving the way for an easing of tensions in the region.
“One thing we can say with confidence is that if part of the reason for last week’s fall in oil and improvement in geopolitical risk sentiment was the news of John Bolton’s sacking ... and thoughts this was a precursor to some form of rapprochement between Trump and Iran, then it is no longer valid,” said Ray Attrill at National Australia Bank.