Even though Air India disinvestment plan may have failed to take off, the discussions on a bailout package for cash-strapped national carrier are at an ‘advanced stage’
Air India bailout: Even though Air India disinvestment plan may have failed to take off, the discussions on a bailout package for cash-strapped national carrier are at an ‘advanced stage’, Reuters reported citing Minister of State for Civil Aviation Jayant Sinha. “We are going through the government approval process,” Jayant Sinha said.
Air India, which has survived for years with help from government, has asked centre for Rs 21.21 billion ($292 million) in additional equity to pay the carrier’s bills to vendors. In September, $120 million capital injection for Air India was on the way, and the government is also working on a relief package for the airline industry, he added. To date, the national carrier has received equity infusion of Rs 28,175 crore.
In the month of June earlier this year, the government had shelved a plan to sell 76 percent stake in the national carrier due to lack of interest from bidders.
The government had originally proposed to offload majority equity share capital of the national carrier as well as transfer the management control to private players. The buyer would have had to take over Rs 24,000 crore debt or the carrier along with over Rs 8,000 crore of liabilities.
The centre found no bidders when the bidding process got completed on May 31. In June, the GoM then decided not to go ahead with Air India stake sale in an election year. According to the latest data, in 2016-17, two subsidiaries of Air India namely AIATSL and Air India Express Ltd booked profits.
Air India, which has been in losses for a long time now, holds a debt burden of Rs 48,000 crore at the end of March 2017.
Air India is staying afloat on a bailout package issued by the last UPA government in 2012. The government is also finding ways to infuse more funds into the carrier.