Now,Jet seeks ministrys help for concessions from oil firms

In the wake of mounting losses,the countrys largest private airline,Jet Airways,is again knocking on the governments door looking for some reprieve. It has now asked the civil aviation ministry to take up its case with the oil ministry to grant it temporary concession in the commercial terms from oil marketing companies.

The airline,in its recent communication to the government,has sought extension of the credit period from the oil marketing public sector units from 60 days to 90 days. It has also sought interest payment waiver on the delayed payments till date. The company has told the ministry that a substantial chunk of its total dues towards all suppliers consists of those towards oil companies on account of the rise in fuel prices in 2008. In 2008-09,the annual fuel bill of the company ran up to Rs 500 crore. It has cited its precarious cash flow situation over the last 12 months mainly on account of the general economic slowdown as the reason for seeking the concession. While we are continuously implementing measures to improve operational efficiencies through cost control,route rationalisation,eliminating non-profitable routes,leasing out surplus aircraft as a result of capacity downsizing,these measures by themselves are inadequate to bridge the cash flow mismatches, the company has said.

The carriers other vendors like Boeing,Airbus Corporation,STAE,Lufthansa Technics,caterers,aircraft lessors and communication and IT companies have recently extended the credit period without seeking interest on the delayed settlement of bills,the company said.

Almost 80 per cent of the carriers fuel requirements are procured from Indian Oil Corporation. In the last six years,the companys fuel uplifts from IOC have seen a sharp increase of 20 per cent year-on-year. The carrier has failed to extract the concessions from the IOC in the past one year,despite several attempts. Now,it wants the civil aviation ministry to take up cudgels on its behalf.

Jet is in the process of raising long term funds soon,for which it has filed an application with the government for necessary approvals. We hope to overcome the tight financial situation over the next six months,for which we need your support and co-operation, the company said.