Oil company halts jet fuel supplies to ailing Kingfisher

NEW DELHI, India – In fresh trouble for Kingfisher Airlines, state-owned Hindustan petroleum Corporation Limited (HPCL) today stopped jet fuel supplies to the ailing carrier due to non-payment of dues

NEW DELHI, India – In fresh trouble for Kingfisher Airlines, state-owned Hindustan petroleum Corporation Limited (HPCL) today stopped jet fuel supplies to the ailing carrier due to non-payment of dues which resulted in 6 flights being cancelled in Bombay and some disruptions in Delhi.

HPCL, which is Kingfisher’s biggest aviation fuel supplier, stopped refuelling the Vijaya mallya-run firm’s airlines at around 1830 hours today, a senior company official said.

The cash-strapped airlines, which has over Rs.425 crore outstanding in fuel dues to HPCL, had not been honouring its daily fuel bills, prompting the oil company to snap supplies.

Indian Oil Corporation (IOC) supplies negligible quantifies to Kingfisher while Bharat Petroleum Corporation Limited contonues to sell fuel to the airlines on a cash-and-carry basis at some airports.

A spokesperson of Mumbai International Airport Limited said 6 Kingfisher flights have been cancelled since this evening. Irate passengers protested over the last minute cancellations.

At least three Kingfisher flights were delayed in Delhi, airport sources said.

“We first cut supplies to Kingfisher for a couple of hours earlier this month. But it didn’t help and we had to snap supplies this evening,” the HPCL official said.

Kingfisher buys ATF jet fuel worth Rs.4-4.5 crore daily from HPCL. The airline was last year put on cash-and-carry and has to make daily payments before it is supplied jet fuel.

The official said Kingfisher had provided bank and corporate guarantee to cover for the past dues of over Rs.425 crore but HPCL has so far not decided to encash the guarantees.

The decision came close on the heels of global airlines body IATA suspending Kingfisher’s participation for not clearing its dues.

The ailing carrier said payments would be made as soon as tax authorities de-froze its bank accounts.

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Linda Hohnholz

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