Among the bleeding airline companies, billionaire Vijay Mallya-promoted Kingfisher Airlines has the highest unpaid fuel bills amounting to Rs 840 crore (Rs 8.4 billion) with the three state-owned oil marketing companies, according to information collected from the OMCs.
The airline, which recently merged itself with budget carrier Deccan Aviation, has to pay Rs 100 crore (Rs 1 billion) as outstanding to Indian Oil Corporation, which includes Rs 40 crore as payment for interest after the credit period.
Normally, OMCs supply aviation turbine fuel at 30-60 days credit period to private airlines. The merged entity has an outstanding of Rs 450 crore (Rs 4.5 billion) with Hindustan Petroleum Corporation and Rs 289 crore (Rs 2.89 billion) with Bharat Petroleum Corporation.
Sources said the OMCs, which themselves are working on borrowed funds, are putting pressure on these airlines to clear dues. The combined debt of IOC, BPCL and HPCL is estimated in excess of 1,10,000 crore (Rs 1,100 billion) as on September 2008 because of selling petroleum products below the production cost.'
"We are pressurising them to pay up at the earliest and companies such as IOC has sent notices to some of the airlines that it would stop fuel supplies unless the dues are cleared," said a source, who did not want to be identified. An IOC spokesperson declined to comment.
"We are surviving on borrowed funds and such outstanding and payment defaults are a cause of concern for us," said S Radhakrishnan, director (marketing) of BPCL. "We are in discussions with the aviation companies for clearing the dues, which are outstanding beyond the normal credit period, so that ATF supplies are not affected in the immediate future," he added.