AI spends 85% of equity infusion on salaries, loans in FY13

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SummaryAir India spent over 85% of its R6,000-crore equity infusion last year on clearing pending staff salaries, paying off aircraft loans and interest and its debt to oil companies and airport operators.

Air India spent over 85% of its R6,000-crore equity infusion last year on clearing pending staff salaries, paying off aircraft loans and interest and its debt to oil companies and airport operators.

Of the R6,000 crore received in 2012-13, the airline spent R1,803 crore on pending staff salaries, paid off R1,253 crore as jet fuel dues to oil marketing companies and R1,100 crore as loan and interest payments for aircraft acquired, official data showed.

The airport operators were paid R976 crore, service tax department R510 crore and R286 crore was spent on aircraft spares. Another R72 crore was paid to IATA travel agents due to flight cancellations during the pilots’ strike and on other heads.

Regarding equity infusion in Air India, the government had committed to provide R30,231 crore between 2011-12 and 2020-21 as per the Financial Restructuring Plan (FRP).

However, it has made a budgetary provision of only R5,000 crore in 2013-13, whereas it should have infused an additional R3,574 crore as the balance of unpaid amount since 2011-12, as laid out in the FRP.

The data showed that in 2011-12, the government was to have infused equity of R8,536 crore but actually released R1,200 crore. In 2012-13, it was to release R3,678 crore along with the balance of R7,336 crore. But it released only R6,000 crore, leaving a balance of R5,014 crore.

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