Air India agrees to pay up oil dues by Friday

Cash-strapped Air India is reported to have already cleared a major portion of its dues to state-run oil marketing companies and is expected to pay up the remaining amount by Friday, the deadline set by the OMCs.

Reports quoting sources at one of the state-run oil marketing companies said Air India owed more than Rs4,700 crore ($954 million) to the three state-run oil marketing companies - Indian Oil Corporation, Hindustan Petroleum Corporation and Bharat Petroleum Corporation.

"We are well within the credit limit of oil marketing companies," Reuters quoted an unnamed Air India spokesman as saying.

OMCs have threatened to halt fuel supplies to Air India from Friday for non-payment of oil dues.

The airline, which is already in the cash-and-carry mode in aircraft fuel purchases since 24 January, is yet to clear previous dues, reports said.

Air India, like other airline companies in the country, is struggling with cost overruns and low fares. Almost all major carriers have reported losses and continue to make losses.