Kingfisher’s troubles mount as BPCL sues

Merged airline Kingfisher Airlines is dodging serious trouble with state-owned refiner, Bharat Petroleum Corporation Ltd (BPCL) suing the Bangalore-headquartered outfit for recovery of dues. Media reports suggest that an arbitration petition has been filed in the Bombay High Court on 19 June asking the defaulting airline to clear outstanding dues of Rs300 crore.

BPCL has also asked the Vijay Mallya-owned airline to lift fuel only on a cash-and-carry basis as its credit facility has been withdrawn.

A local report also quoted Kingfisher spokesperson denying that any legal tussle with BPCL was underway. "We are in compliance with the credit arrangements with the OMCs from whom we lift fuel as agreed from time to time," the spokesperson said.

Another state-owned OMC, Indian Oil has also asked Kingfisher to pay for its fuel on cash and carry basis after cashing its bank guarantee of Rs50 crore when the airline's cheque bounced.

The Airports Authority of India (AAI) has already put the airline on a cash-and-carry mode for using airport facilities with the airline's current dues with AAI exceeding its bank guarantee of Rs100 crore.

Apparently, this is a record of sorts with Kingfisher becoming the first airline in the country to be accorded this dubious honour.