Debt-ridden Air India has sought immediate emergency funding of about £250 million from the government as debt. This fiscal the divestment-bound airline, which has accumulated debt-cum-liabilities of almost £6 billion, has not got any equity support from the Centre and is now finding it hard to meet working expenses.
“Last October, the government had approved giving AI sovereign guarantee to enable it to raise £760 million. We raised about £500 million as debt. Now guarantee of £246.4 million is remaining and we have been requesting the government to give us those funds as debt,” said an official.
The airline said in a statement: “In the absence of equity support Air India cannot handle the huge debt service liabilities. However, our financial performance this fiscal is very good and we are moving towards a healthy operating profit. The airline, despite its legacy issues, is performing very well.”
“We have got one relief this fiscal which is £2.9 billion of our loan is being taken off our books and is being serviced by the government,” said the official. AI had last month delayed paying flying allowance of pilots for June - which comprise over 85% of their total pay - and the same was paid at the end of July. Now again the flying allowance of July is being awaited by pilots. “The uncertainty is growing by the day for us. Festival season is upon us and we will request the airline and the government to run the airline properly till they are the owners of AI. Once and it is sold off, then the new owner will be responsible. But for now the current owner has to take the onus of paying people on time,” said a senior pilot.
The government is working out the modalities of the second attempt that will soon be made to sell off AI after the first round last year came a cropper.
