Air India allowed to take fuel on credit for 2-3 months

New Delhi, Aug 18 (PTI) In a major relief for Air India,
Petroleum Ministry on Wednesday decided to grant two to three
months credit to the troubled airline for jet fuel instead of
making daily payments.
The national carrier had been put on cash-and-carry mode
by public sector oil companies since last December as it owes
more than Rs 2,000 crore to them.
Air India has been paying Rs 16.5 crore a day for lifting
aviation turbine fuel (ATF) for its day-to-day operations.
The decision on providing fuel credit was taken by a
Group
of Ministers, headed by Finance Minister Pranab Mukherjee,
which also reviewed the latest financial and operational
performance of the ailing carrier, Civil Aviation Minister
Vayalar Ravi told reporters here.

"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," Ravi said, adding, "So, the tension of making
daily payments is now over".
The meeting was also 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 the first meeting of the GoM which was attended by
the newly appointed CMD of Air India Rohit Nandan.
The cash-strapped and debt-ridden national carrier has
outstanding loans and dues of Rs 67,520 crore, of which Rs
21,200 is working capital loan, Rs 22,000 crore is long-term
loan on fleet acquisition, Rs 4,600 is vendor dues and an
accumulated loss of Rs 20,320 crore.
"A sub-committee of the Finance Ministry will submit a
report on the Turnaround and Financial Restructuring Plan next
month," the Minister said, adding that the GoM will meet again
in mid-September.
"All attempts to strenghthen Air India with some
financial support to improve its cash flow will be made by the
government," Ravi said.