Air India Is Behind on Its Fuel Bills and Its Suppliers Are Cutting It Off
Three government-owned Indian oil companies earlier this month decided to stop supplying fuel to state-run Air India at six airports on the subcontinent, because the carrier has been unable to pay its bills.
The airline has long been in dire financial straits. It has billions of dollars in debt, and even when the government tried to sell the company off into privatization, there were no takers. It continues to limp along, but the decision by the national oil companies is a stark sign of its continuing troubles.
"It's more than embarrassing when oil companies cut off a state-owned airline for non-payment of bills — it's alarming," said Henry Harteveldt, a travel industry analyst and founder of Atmosphere Research. "It brings into question everything about the airline, including, importantly, its ability to maintain its aircraft, its ability to ensure its crews are trained the way they're supposed to be."
Related: How Much Does It Cost to Fuel up an Airliner?
Air India told local media that its newly restricted fuel supply would not affect operations. An airline official said that flights to the six airports where refueling is now prohibited are loaded with enough fuel for the return legs as well. Long-haul flights are not affected by the restrictions, and there's currently no sign of passengers being stranded by planes with empty fuel tanks.
For Harteveldt, though, the news remains a troubling sign about the airline's general financial health. He also pointed out that these refueling restrictions could make passengers wary about booking travel on Air India, even if the airline's operations aren't noticeably affected.
"News like this may affect consumer confidence in booking the airline, especially for business travelers who want to be sure their flights will operate," Harteveldt said. "If business travelers book away or book away in larger numbers than they may already be doing, that cuts away a key source of profitable business for Air India."
Related: What Is Jet Fuel, and How Does It Work?
Such booking shortfalls could lead to a continuing cascade of financial trouble for the airline.
"If this problem continues to intensify, at what point does Air India start to cut back on flying, reduce the number of frequencies it operates, drop routes, drop destinations?" Harteveldt said.
In the end, he continued, the fuel supply problem is "yet another nail in the Air India coffin."
"No airline has been able to shrink its way into profitability," Harteveldt said, "and this news will intensify consumer concern and further reduce consumer confidence in booking the airline."
Related: 20 Things I Hated About My Air India Business-Class Flight to NYC
Related: 10 Reasons I'm Glad I Gave Air India Another Chance
TPG featured card
at American Express's secure site
Terms & restrictions apply. See rates & fees.
| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 5X | New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App. |
| 3X | Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines. |
| 2X | Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com. |
| 1X | Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases. |
Pros
- Valuable dining and food-related credits
- Flexible rewards with airline and hotel transfer partners
- Multiple travel and purchase protections
- No foreign transaction fees
- Access to Amex Offers for additional savings (enrollment required)
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $8,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App.
- Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines.
- Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- Pay It® lets you tap in the American Express® App to quickly pay for small purchase amounts throughout the month and still earn rewards the way you usually do. Plan It® gives you the option to split up big purchases into equal monthly payments with a fixed fee. You’ll know upfront exactly how much you’ll pay.
- Updated! $120 Dining Credit: Earn up to a total of $10 in statement credits monthly when you pay with the Gold Card at Grubhub (including Seamless), Buffalo Wild Wings, Five Guys, The Cheesecake Factory, and Wonder. This can be an annual savings of up to $120. Enrollment required.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year at over 10,000 qualifying U.S. Resy restaurants after you pay for eligible purchases with the American Express® Gold Card. That’s up to $50 in statement credits semi-annually. Enrollment required.
- $84 Dunkin' Credit: Earn up to $7 in monthly statement credits after you pay with the American Express® Gold Card at U.S. Dunkin’ locations. Enrollment required.
- $120 Uber Cash on Gold: Enjoy up to $120 in Uber Cash annually with your Gold Card. Just add your Card to your Uber account and you'll get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an Amex Card for your transaction.
- New! As an American Express® Gold Card Member, you can enjoy complimentary Hertz Five Star® Status. Enjoy benefits like skipping the counter at select locations, adding an additional driver at no additional cost*, and vehicle upgrades**. Benefit enrollment and Hertz Gold+ registration are required. *Additional drivers must meet standard rental qualifications and must be a spouse or domestic partner to qualify as complimentary. Other additional drivers subject to fees. **Benefits are subject to availability and vary by location. Additional Hertz program Terms and Conditions including age restrictions apply.
- Take advantage of a $100 credit towards eligible charges* at over 1,300 upscale hotels worldwide when you book The Hotel Collection through AmexTravel.com or the Amex Travel App **. *Eligible charges vary by property. **The Hotel Collection requires a two-night minimum stay.
- Book your travel through the Amex Travel App with added peace of mind – backed by American Express® service and support. Only for American Express® Card Members.
- Whenever you need us, we're here. Our Member Services team will ensure you are taken care of. From lost Card replacement to statement questions, we are available to help 24/7.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.