Date:17/10/2008 URL: http://www.thehindu.com/2008/10/17/stories/2008101759951200.htm

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Sacking uncalled for, says Deora

Special Correspondent

Jet, Kingfisher defaulting on payments to oil marketing firms

NEW DELHI: Petroleum and Natural Gas Minister Murli Deora on Thursday termed the sacking of nearly 1,900 employees by international carrier Jet Airways in the midst of the festival season as “uncalled for and immature.”

Mr. Deora also noted that both Jet Airways and Kingfisher Airlines had been defaulting on payments for the ATF purchased from the Oil Marketing Companies. While the total default of Jet Airways stood at 1123 crore, that of Kingfisher Airlines stood at Rs. 881.02 crore. Indian Airlines and Air India owed Rs. 889 crore to the OMCs, taking the total outstanding to Rs. 2914 crore.

Referring to the sudden sacking of 1,900 employees by Jet Airways, Mr. Deora said there was little doubt that the aviation sector was going through a hard time but retrenchment of people on such a large scale was unacceptable.

“The Jet Chairman Naresh Goyal is a good friend of mine. But I do not approve of this sacking. You cannot do such a thing. We have supported Mr. Goyal several times. This is not the right time to retrench people, particularly before Diwali,” he told newsmen here.

Mr. Deora said he had brokered a deal between Jet and Indian Oil Corporation recently under which the airline was given 60 days time to make payments for fuel it bought from state-run oil firms.

The airline had not kept the agreement and Jet Airways had defaulted on payment of Rs. 259 crore in bills raised more than two-and-half months back.

Petroleum Secretary R.S. Pandey said Jet bought ATF worth Rs. 330 crore every month. “These are difficult times for airlines. IOC, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited practically live on borrowings and so the airlines have to clear their outstanding at the earliest,” he said.

Mr. Pandey justified the present pricing structure of ATF saying the rates were fixed at imported price because around 80 per cent of the crude oil used to produce the fuel was imported at international rates.

“If there are demands for reduction in taxes, the issue is to be addressed by the Finance Ministry and State governments,” Mr. Pandey said. The National Aviation Company of India Ltd. did not have any grace period with oil firms and had an outstanding of Rs. 606 crore as on October 8.