No money for oil, Air India cancels 60 flights

India?s national carrier Air India grounded 10 percent of its fleet on Thursday after fuel suppliers refused to provide more oil on credit to the cash strapped airline that already owes them over Rs 2,700 crore.

In a huge embarrassment to the flag carrier, best known for ego tussles in the high ranks and panned universally for gross mismanagement, 60 flights both from domestic and international routes, were withdrawn on Thursday, reports said.

The callous shutdown, adding to passenger woes right in the middle of the peak travel season seemed to be compounded by the fact that many of the flights cancelled were supposed to connect extremely busy airports like London, Delhi, Mumbai and Bangalore.

Air India however put up a defiant face as it claimed that the cutbacks were ?routine?. “Flights are curtailed every lean season, This is being done for commercial reasons,? Air India officials told NDTV.

Among the flights cancelled are 14 round-trips each to London and Dubai from Delhi and four to Tokyo, media reports said.

The grounding of flights comes within a week of an ultimatum from fuel suppliers and airport operators that threatened to halt the airline?s operations on May 27.

That day, barely hours after a settlement was reached with the three-state run oil suppliers to allow more grace time to the airline, GMR the operator the New Delhi and Hyderabad airports, fired an ultimatum to Air India, along with Kingfisher Airlines, to cough up airport charges.

Media reports said that Air India owes the Delhi airport Rs 217 crore and the Hyderabad airport Rs 35 crore.

The airline had to cancel five flights on Friday, including an international, from Kerala after oil companies refused to supply aviation fuel to Air India unless it cleared dues that totalled to well over Rs 2,000 crores.

However an understanding was reached between the companies and Air India after the Civil Aviation Ministry stepped in to rescue the flag carrier and reportedly promised help pay back the dues.

The airline, fresh from a 10-day-strike by pilots that cost it Rs 150 crores in losses, was put on a cash-and-carry payment basis last year by oil suppliers and also by the airport operator GMR.

Caught in internal management feuds, the airline reported losses of Rs 34.5 billion in the first half of the last fiscal year on top of a loss of Rs 55.5 billion during the previous 12 months, according to government figures.

Roped in to rescue the embattled airline as the Chief Operating Officer, high profile aviation manager Gustav Baldauf resigned in February this year after expressing his frustration at relentless government interference.

Echoing analysts, Baldauf, who claims 25 years of experience in the industry, had slammed the everyday political interference saying that he was hardly being given any freedom to turn around the the heavily-in-debt national airline.