Indian Oil halts fuel supply to Jet Airways over non-payment of dues

Lloyd Doyle
April 12, 2019

Its pilots, who along with engineers and senior management have not been paid since January had on Tuesday sent a legal notice to the management which is now being headed by the lenders led by State Bank.

Apart from employees, aircraft lessors are also upset with the current financial situation with some of them requesting the Directorate General of Civil Aviation (DGCA) to de-register their aircraft leased to the company.

Bidders in a consortium that bids for acquiring stake in cash-strapped Jet Airways have to furnish individual solvency certificates, according to SBI Capital Markets.

"IndianOil has stopped fuel supplies to Jet Airways in Mumbai, New Delhi and Hyderabad airports for its failure to clear dues", the source said.

The country's largest oil marketing company Indian Oil Corporation (IOC) has resumed fuel supply to Jet Airways. The lenders on Wednesday extended the deadline to April 12 and the bidders have to submit their bids by 6pm. However, the airline said that other fuel retailers continue to supply its aircraft.

According to the EOI document issued on Monday, April 10 is the last date for submission of initial bids.

Under the clarification issued on Wednesday, lenders have allowed "acquisition ownership of the company on as is where is basis. and/or restructuring of the existing facilities and infusion of funds by way of loans or acquisition of up to 75 per cent equity stake in the company".

An aircraft of debt-ridden Jet Airways was seized by a European cargo firm over non-payment of dues. Jet Airways, however, said the flight was delayed due to "operational reasons".

Troubles for the full service carrier have mounted over the last several months, as operating expenses rose and many of its planes were grounded as the loss making airline failed to pay its lessors.

The aircraft had been due to depart Schiphol at 11:25am this morning on its way to Mumbai, but the flight had yet to take-off (at the time of publication, 15:30 CEST) because of the aircraft seizure.

The union, which is responsible for representing more than 1,100 Jet Airways pilots, has set a payment deadline for April 14th.

Other reports by Iphone Fresh

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