CNN-IBN reports that airlines will pay all outstanding dues on aviation fuel to oil companies in six monthly installments and will be given a credit limit of 90 days to purchase the current requirement of aviation turbine fuel (ATF), it was decided in the national capital on Wednesday.
The decision was taken at a meeting of heads of various airlines and oil companies and presided over by Civil Aviation Minister Praful Patel and Petroleum Minister Murli Deora to discuss payment of dues to oil companies.
"Cumulatively, the dues of the airlines industry to the oil companies are about Rs.2,500-2,800 crore (Rs.25-28 billion). We have decided that this shall be cleared by the airlines in six-monthly instalments by March 2009," Patel told reporters after the meeting.
He added that for current uplift of ATF, oil companies will extend to all airlines a credit limit of 90 days; besides, oil companies will start revising ATF prices every fortnight, replacing the current monthly revision.
Kingfisher Airlines chairman and CEO Vijay Mallya, Jet Airways executive director S.K. Dutta and Air India chairman Raghu Menon were amongst those present. So were the chiefs of state-run oil firms Indian Oil Corp, Bharat Petroleum and Hindustan Petroleum.
The meeting was necessitated as some airlines have defaulted on payments for the ATF they have bought at the end of their 60-day credit period.
Patel also said he had "cautioned" airlines that they would have to take more responsibility if they wanted support.
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