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Air India has faced suspension of fuel supplies multiple times in last 10 years, says former ED Jitendra Bhargava

Updated : August 23, 2019 11:43 AM IST

Six airports, which includes Ranchi, Vizag, Kochi, Pune, Mohali, and Patna, have stopped supplying jet fuel to Air India at a time when the national carrier is grappling with debt worries. Air India is sitting on a mammoth debt of almost Rs 58,000 crore.

Jitendra Bhargava, the former executive director of Air India, spoke to CNBC-TV18 about the development.

Bhargava said this isn't the first time that the airline has faced suspension of fuel supplies. “What would happen again is that Ministry Of Civil Aviation will call the Petroleum Ministry and they will resume supplies or they will make small payment to oil company and supplies may resume,” he said on Friday.

According to Bhargava, the suspension of Air India's fuel supply should not be news at all because this isn’t the first time it has happened and in the past ten years, it happened no less than half a dozen occasions, even at key airports.

"However, the bigger threat is the growing debt and the thinking in the ministry is that but for the huge debt, everything is hunky-dory as far as Air India is concerned. The reality of systemic weakness is not being addressed,” he said in an interview with CNBC-TV18.

According to him, "The airline industry has to vital parameters – one is on-time performance and load factors, which has no extraneous factor-like debt, competition, government intervention etc but yet Air India continues to rank amongst the bottom amongst all airlines. So, one needs to be realistic as to where things are going wrong and unless you diagnose the problem how can there be a solution, he said.

When asked what would be the solution for Air India’s problems, he said, "The only solution is disinvestment. If we want to retain the Air India brand, disinvestment is vital otherwise the growing marginalisation as other carriers increase their capacity at a faster pace than Air India, from one out of eight passengers flying Air India today, it will become one in ten, one in twelve in the next five years. Who would love to have an Air India brand name with only 5-7 percent market share."
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