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.


New Delhi to sell full stake in debt-ridden Air India

Updated 1 min 27 sec ago

New Delhi to sell full stake in debt-ridden Air India

  • The airline, which owes more than $8 billion, has been struggling to pay salaries and buy fuel
  • Formerly India’s monopoly airline, carrier was once known affectionately as the ‘Maharaja of the skies’

MUMBAI: New Delhi intends to sell its entire stake in the debt-crippled national carrier Air India, the government announced Monday, after failing previously to secure any bids for a majority share.
The airline, which owes more than $8 billion, has been struggling to pay salaries and buy fuel, with officials recently warning that it would have to shut down unless a buyer was found.
On Monday the civil aviation ministry released a document inviting bids for a 100 percent stake, setting March 17 as the deadline for initial submissions.
Potential buyers would have to assume around $3.26 billion in debt, the document said.
The government was forced in 2018 to shelve plans to sell a 76 percent stake in Air India after failing to attract any bidders.
India’s Tata Group, Singapore Airlines (SIA) and IndiGo were all linked to a takeover but subsequently ruled themselves out.
Founded in 1932 and formerly India’s monopoly airline, the company was once known affectionately as the “Maharaja of the skies.”
But it has been hemorrhaging money for more than a decade and has lost market share to low-cost rivals in one of the world’s fastest-growing but most competitive airline markets.
In November aviation minister Hardeep Singh Puri had said the airline would “have to close down if it is not privatized.”
State-run oil companies halted fuel supplies to Air India in August after it fell behind on payments, though the firms agreed to lift the suspension a month later after talks brokered by the government.
The country’s aviation sector has been stuck in a slump since the collapse of Jet Airways last year.