With the NDA government set to present its third budget next month, the Prime Minister’s Office has sought a detailed performance report from flag carrier Air India, which is surviving on a Rs 30,000 crore bailout package from the exchequer. Top Air India management is expected to make a presentation in this regard during a review meeting at South Block later this week, sources said today.
The government-run carrier reported operating profit of Rs 105 crore, the first time since the merger of erstwhile Air India and Indian Airlines, in the previous fiscal mainly on account of low fuel prices and discounted ticket sales, among others.
“These review meetings are a part of the monitoring mechanism since the government is infusing funds in the carrier,” an airline official said on condition of anonymity.
According to the official, besides giving a presentation on the current financial position of the airline, the proposal to increase retirement age in Air India from the current 58 years to 60 years and its request for more funds for the current fiscal are also expected to come up for discussions.
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Air India is surviving on a Rs 30,231 crore bailout package extended by the previous UPA government in 2012 for a 10-year period and also equity support for payment of principal/interest of the non-convertible debentures.
Of the total package, the government has already infused over Rs 24,000 crore in the carrier between April 2011 and December last year.
However, Air India’s total borrowings stood at Rs 46,570,35 crore as on September 30, 2016. Against a demand of Rs 3,901.49 crore, the carrier was allocated Rs 1,713 crore for the ongoing fiscal, leaving it with a deficit of Rs 2,188.49 crore.
Later, as part of the supplementary demands for grants, passed by the Lok Sabha during the winter session, Air India also received equity investment to the tune of Rs 861.50 crore.