Insist on cash-and-carry model for fuel sale

After managing to survive the blow dealt to its fragile financial health by the recent 10-day pilots' strike, national carrier Air India is again finding itself in a tight spot.

This time round, State-run oil marketing companies — the Indian Oil Corporation, the Bharat Petroleum Corporation Ltd. and the Hindustan Petroleum Corporation — have put the ailing carrier on notice to get its daily fuel on cash-and-carry sales model.

Battling huge financial losses and mounting dues to the oil marketing companies, Air India will be left with no choice but to slash its daily flights if the cash-and-carry sales model comes into operation. Sources in Air India confirmed on Thursday night that the oil marketing companies have conveyed to it that the airline would be sold its daily requirement of aviation turbine fuel (ATF) on the basis of cash which it is able to pay the oil companies. Air India operates nearly 320 flights on domestic and international sectors daily.

“Air India pays about Rs. 22 crore daily to oil marketing companies. It came down substantially to about Rs. 9 crore during the pilots' strike. After the strike was over, the carrier is able to shell out about Rs. 18 crore daily to oil marketing companies,” the sources said.

However, Air India spokesperson said the airline had already approached the Civil Aviation Ministry and expressed the hope that the matter would be resolved amicably with the intervention of the government.