Unpaid bills haunt Air India

Fuel suppliers and airport operators threatened to halt operations of India?s national carrier Air India on Friday if the cash-strapped airline did not clear their dues totalling over Rs 2,600 crores.

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.

Earlier in the day, the airline had to cancel five flights, including an international, from Kerala after oil companies refused to supply aviation fuel to Air India unless it cleared dues that totalled to about Rs 2,400 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.