New Delhi: Air India Ltd has committed to clear dues to banks and aircraft leasing companies in a fortnight by when it expects to get fresh capital infusion from the government, said an official at the debt-ridden national carrier.

The carrier, which recently failed to draw investor interest in a privatisation attempt by the government, has sought about 2,121 crore from the government this fiscal year as part of an ongoing bailout package.

The company has already received 650 crore so far this fiscal for meeting operational expenses. In the three years up to 2017-18, Air India has received a fund infusion of 7,565 crore.

“We are confident of getting the equity infusion and shall clear all dues to our lenders and business partners by 15 August," said the official, who spoke on condition of anonymity.

The official was referring to the “first reminder" issued by some lenders and aircraft leasing companies urging the company to clear outstanding dues.

Three banks and two aircraft leasing companies have served default notices on Air India over the last few weeks, Reuters reported on Monday citing news reports.

The government had to put off plans to privatise Air India as higher jet fuel prices and the intention of it retaining a 24% stake post sale, dampened investor enthusiasm.

Minister of state for civil aviation Jayant Sinha had last week informed Lok Sabha that the government is committed to improving the operational efficiency and performance of the airline.

The company is reeling under accumulated debt, which scaled 48,781 crore at the end of March 2017.

The carrier now has about 12.3% share of the Indian domestic market, down from about 30% in 2002.

Air India and its low cost international carrier Air India Express have around 42.8% share of the international traffic to and from India among Indian carriers and about 16.9% share when global airlines are also taken into account.

The carrier is expected to face more competition with private airlines going for a massive expansion in capacity. Although loss-making, Air India’s net losses before exceptional and extraordinary items have been steadily declining in the four years up to 2016-17.

As per company documents, net losses before extraordinary items declined from 6,939 crore in 2013-14 to 3,620 crore in FY17.

Close