State-run OMCs ask Air India to clear dues amid rising oil prices: Source

State-run oil marketing companies have asked loss-making Air India to clear its dues towards daily billing amid rising oil prices, a source said Friday.

Air India group, which comprises Air India, Air India Express and Alliance Air, currently operates 475 flights per day to 78 domestic and 44 international destinations with a combined fleet of 161 aircraft.   

It is the only domestic carrier which flies long and ultra-long haul flights or flights which are up to 16 hours duration.

"The three government-run oil marketing companies have asked Air India to clear their dues which have increased due to the oil prices going up significantly in the last couple of months," a source said.

An Air India official said that the oil companies have sought to increase the payment amount, citing the everyday increase in oil prices.
 

The government-run airline lifts jet fuel from three oil marketing firms -- Indian Oil Corp, Bharat Petroleum Ltd and Hindustan Petroleum Ltd -- worth Rs 6 billion per month on an average.  

After failing to get a buyer earlier this year, Air India, with a debt pile of over Rs 500 billion, is facing a cash crunch and has been delaying various payments, including salaries to its staff. 

Early this month, it had sought Rs 5 billion through short-term borrowings to meet its working capital requirements.

In July, the government had sought Parliament's approval for Rs 9.8 billion in supplementary grants towards equity infusion in the national carrier. The amount is still awaited by the carrier.
 

The carrier had borrowed Rs 62.5 billion from various banks between September and March quarters last fiscal for its day-to-day capital needs.

Air India is staying afloat on a bailout package extended by the government in 2012, as part of a turnaround plan (TAP) and a financial restructuring plan (FRP). In the current fiscal year, it has received an equity infusion of Rs 6.5 billion up to June.