Air India seeks equity infusion of Rs6,600 crore

Air India seeks equity infusion of Rs6,600 crore

New Delhi: A proposal for equity infusion of Rs6,600 crore for Air India has been mooted by the civil aviation ministry to enable the airline clear its massive dues.

A Group of Ministers (GoM), which is expected to meet later this month, may take a view on the plan which also includes restructuring of loans of Rs43,200 crore and vendor dues amounting to Rs4,600 crore, official sources said.

After an ad hoc payment of Rs500 crore to partly clear its dues to Air India on account of VVIP travel and evacuation flights, government would soon release another tranche of Rs705 crore to it.

Air India sought Rs6,600 crore as part of a “big dose" of equity infusion to clear its dues, saying most of the equity infusion it has received so far has gone to pay off staff salaries and part of interests on loans, besides daily bills of jet fuel.

The ailing national carrier has a working capital loan of Rs21,200 crore, long-term loan on fleet acquisition of Rs22,000 crore, vendor dues and accumulated losses worth Rs20,320 crore, as per the latest figures.

While welcoming equity infusion by the government, airline officials maintained that this would not solve all the problems, though a series of steps were being implemented to slash monthly losses.

“We have demanded Rs6,600 crore from the government. Most of the latest tranche of Rs1,200 crore would go to pay salaries and clear some dues," a senior official said, adding that the airline actually needed “a big dose of equity infusion and immediate approval of our financial restructuring plan".