MUMBAI: Air India, the national flag carrier of India, is facing a historic debt crisis as it sought on Friday government help after oil companies refused to supply any more fuel at six domestic airports due to late payment of dues.
Dhananjay Kumar, spokesperson of Air India said, “We have huge outstanding debts and are awaiting equity support from the government to maintain current operational levels.”
Air India owes three state-run oil firms more than INR45 billion ($630 million). These firms have suspended fuel supplies to Air India aircraft at six Indian cities, namely, Pune, Ranchi, Patna, Mohali, Kochi and Vishakhapatnam.
The airline, founded in 1932, was once the country’s monopoly airline, known affectionately as the “Maharaja of the skies”. However, it has been losing money for years, giving away market share to low-cost rivals.
Successive governments spent billions of dollars to keep it flying before Prime Minister Narendra Modi’s cabinet gave the go-ahead for a sell-off in 2018. The Indian government holds, which holds 76 % shares in the Airlines had to give up the idea of selling it after failing to attract any bidders.