Major crisis averted at ailing Jet Airways as IOC resumes fuel supplies

A major crisis was averted at the cash-starved Jet Airways after national oil marketing major IndianOil resumed fuel supplies to the airline, which was halted earlier in the day due to the non-payments, sources said Friday. The supply, which was stopped around noon was restored at around 5 pm after airline assured the oil firm of payment of dues, sources told PTI.

"Indian Oil Corporation has resumed supply of aviation turbine fuel to Jet Airways following assurance of payments by the airline," said a source. Earlier in the day, Jet Airways faced operational disruptions across major airports when IOC refused to refuel its planes without clearing the outstanding amount. A Jet spokesperson did not comment on halting of fuel supplies. A State Bank-led consortium of babks will soon take over the management of the airline under a debt-recast plan.

The once-second largest airline has drastically curtailed its operations since last month following severe cash crunch and is operating only 26 planes of 124 its fleet. Under the new management structure banks will own 50.1 percent in Jet Airways by infusing an emergency fund of Rs 1,500 crore, which will then be converted into equity for a notional value of just Re 1 a share. The airline, however, has yet received the much-needed fund due to some procedural glitches, according to the bankers. 

(With inputs from agencies.)