AI limits ops to tide over fuel woes

Air India has curtailed its international operations to tide over the fuel crisis. With oil companies refusing additional credit, Air India has been forced to reduce nine weekly flights.

"We are paying Rs 16.5 crore to the oil companies daily against their demand of Rs 18.5 crore. Since the companies have refused to give us credit, our schedule is being tweaked. Some of the flights are being combined so that our uplift does not cross Rs 16.5 crore,'' a senior Air India official said. The carrier will now operate a single daily flight on Delhi-London route instead of twice daily flights and will fly twice week on the Delhi-Tokyo route instead of the current four flights. The change in schedule is upto June 15, he stated. It is learnt that a few other international flights to Abu Dhabi and Muscat may be combined and domestic services too may curtailed.

Air India’s daily fuel uplift for its domestic and international flights, including those of Air India Express is 3800 kilolitres. It now spends Rs 550 crore each month on fuel, a rise of over Rs 200 crore over the last year. The official added that a spurt of prices last year had resulted in increase in fuel expenses while the quantity consumed had not risen much. "The tweaking of schedule will help in reducing the fuel expense by 10 percent of the current daily spend. "On certain days if the fuel uplift increases beyond Rs 16.5 crore we will pay for it,'' he added. The airline is also demanding that discounts which oil companies extend to private carriers. The national carrier's Rs 6500 crore annual tender for purchase of aviation turbine fuel will be finalised by June end.

From Friday the oil companies began strictly adopting cash and carry policy forcing the national carrier to cancel ten domestic flights. The oil companies took the tough stance as AI's outstanding on fuel has crossed Rs 2200 crore. The oil companies refused to extend credit as they were incurring a loss of about Rs 2 crore each day. An AI spokesperson said the payment issue was resolved and oil companies had begun supplying fuel. Asked about the curtailment in schedules the spokesperson claimed that decision was still to be taken. Other company officials tried to downplay the issue by saying that airlines do make changes in season depending upon loads. "June-September is a lean season so it is not uncommon for an airline to withdraw some flights,'' an AI official explained.