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Tuesday 19-Jul-2011

HPCL stops fuel supply to Kingfisher over pending dues

The flights resumed from Delhi, Mumbai, Kolkata and Chennai airports after the airline made a part-payment

By  Traveltechie Bureau | Mumbai

Over a dozen Kingfisher Airlines flights were grounded at the country’s four major airports for two hours after Hindustan Petroleum Corporation Ltd (HPCL) refused to supply fuel due to non-payment of dues.

HPCL is the largest supplier of jet fuel to Kingfisher. The airline is supposed to make payments to the oil marketing company every 60 days. The deadline expired last week. The flights resumed from Delhi, Mumbai, Kolkata and Chennai airports after the airline made a part-payment, said sources close to the development.

An HPCL official said Kingfisher’s dues had touched Rs 650 crore, of which Rs 170 crore was not covered by guarantees. “We resumed supply after the airline made a partial repayment,” said an HPCL official, who did not want to be identified.

The UB Group-controlled Kingfisher Airlines is in a financial crisis. It was recently threatened by GMR, which operates Delhi and Hyderabad airports, that it will be put on a cash and carry system after the airline’s dues touched Rs 90 crore (Rs 68 crore for Delhi and Rs 22 crore for Hyderabad).