In what may spell fresh trouble for debt-struck Air India, banks and aircraft lessors have served default notices on the national carrier for missing out on timely payment of dues. Over the last few weeks, three lenders and two aircraft leasing firms have issued notices to the airline raising concerns about its fiscal health, Business Standard reported citing unidentified sources. US-based Wells Fargo Trust Services and UAE’s Dubai Aerospace Enterprise (DAE) are the aircraft lessors which have issued notices to the airline for pending payments, the report added.
Air India debt
Meanwhile, cash-strapped Air India has received Rs 27,195.21 crore worth equity infusion till date from the government under the turnaround and financial restructuring plans approved back in 2012. The state-owned airline received an equity infusion of Rs 650 crore up to June in the running fiscal, Minister of State for Civil Aviation Jayant Sinha told the Lok Sabha earlier last week. A Turnaround Plan (TAP) as well as a Financial Restructuring Plan (FRP) were approved for Air India by the previous UPA regime in 2012.
“The TAP or FRP includes budgetary support amounting to Rs 30,231 crore spread over 10 years ie. up to FY 2020-21 and also equity support for the payment of principal or interest of the non-convertible debentures. “Air India has received an equity infusion of Rs 27,195.21 crore till date,” Jayant Sinha had said. At the end of March 2017, the national carrier had a debt burden of more than Rs 48,000 crore.
The government’s proposal to sell 76 per cent stake as well as transfer management control of the debt-laden airline to private players failed to take off in May. However, Jayant Sinha said the government remains committed to the disinvestment of Air India. The government has already said that it would revisit the Air India disinvestment plan after oil prices, foreign exchange and other global economic indicators stabilise.