Oil companies demand pre-payment for fuel

Published: 7/13/1999

A report from the Vecherny Novossibirsk suggests that Russian oil companies are increasing pressure on airports to pre-pay in cash for fuel deliveries. The airports, in turn, are applying the same stringent demands on the airlines. While some can manage such demands, more vulnerable companies are feeling the squeeze. This has led to an increasing number of flight delays at Tolmachevo airport, Novossibirsk, with reports that some passengers have been kept waiting for days. Boris Yelin, Deputy Head of Passenger Traffic at Tolmachevo, said that: "About a month ago, oil refineries, in particular, Omsky NPZ, demanded that their buyers pre-pay 100% for fuel deliveries. The delivery then takes place 21 days after the necessary amount has been transferred to the refinery's bank account. The airport, in its turn, had to make the same tough demands of airlines". Yelin acknowledged that not all airlines were able to cope. The situation is exacerbated by the increase in the price of aviation fuel, by more than 300% over the last six months, to 4,000 roubles per ton. While ticket prices are showing signs of recovery, the struggle to keep pace with such inflation will put many airlines to the test.

Article ID: 680