Kingfisher Airlines surviving on “cash and carry” mode
October 9, 2009
While Bharat Petroleum Corp Ltd (BPCL) has come down heavily on Kingfisher Airlines on pending dues for jet fuel, repayments to various other entities for services has been an important issue with the airline over the past several months and it is running all its services on a “cash and carry” basis.
In a recent hearing on the jet fuel dues at the Bombay High Court, BPCL demanded a substantial amount to be given as the repayment of dues, against the monthly payment of Rs10 crore offered by the airline. Kingfisher owes BPCL around Rs314. 32 crore. Meanwhile, Kingfisher Airlines alleged that BPCL had not honoured the 90-day grace period granted by the Indian government to all airlines.
Kingfisher owes a total of Rs940 crore to state- run oil companies, including Rs37.40 crore to Indian Oil Corporation (IOC), Rs598.80 crore to Hindustan Petroleum Corporation Ltd (HPCL) and Rs314.30 crore to BPCL.
Along with BPCL, IOC too had put the airline on the “cash and carry” mode since February 2009. Similarly, the Airport Authority of India (AAI) had also disallowed any further credit to Kingfisher in July 2009 and had put all services to the airline on the same mode.
In the court proceedings held yesterday at the Bombay High Court, the BPCL lawyer argued, “They (Kingfisher) put us on “cash-and-carry” just a few minutes before planes were due to take off at various airports.”
Both BPCL and Kingfisher Airlines refused to comment on the matter since it is subjudice.
Last month, Kingfisher Airlines had to face a strike by its ground handling staff, reportedly for non-payment of ground handling fees at the Delhi Airport. However, the spokesperson said, “It was an issue between the staff at of the previous ground handling agency Kingfisher had, and the new ground handling agency that we have hired now. We have asked them to settle the issue in the labour court.” - Amritha Pillay. [email protected]