Govt to release 705 crore to cash-strapped AI soon: Sources

Govt to release 705 crore to cash-strapped AI soon: Sources

New Delhi: After an ad hoc payment of 500 crore to partly clear its dues to Air India, government would release another tranche of 705 crore to the national carrier very soon, official sources said on Wednesday.

Government, which had made a provision of 705 crore in the Supplementary Demands passed by Parliament this Monsoon session, would very soon release the amount to the cash- strapped carrier, they said.

An amount of 500 crore has already been paid on ad hoc basis on account of VVIP travel and evacuation flights carried out by the airline.

Air India estimates that about 613 crore are owed to it by various Ministries, government departments and agencies, apart from the cost of maintenance of aircraft taken out of the operational fleet for VVIP operations.

The national carrier was experiencing a severe financial crisis owing to massive fixed costs like high expenditure on insurance, interest on working capital, aircraft loan and leasing of aircraft. Due to liquidity crisis, it has also not been able to make timely payment of salaries to its employees.

An amount of 373 crore has already been raised by the government from some ministries and departments on account of operating chartered VVIP flights, the sources said.

The airline, which is burdened by an accumulated loss of 20,320 crore, has outstanding loans and dues of 67,520 crore -- of which 21,200 is working capital loan, 22,000 crore is the long-term loan on fleet acquisition and 4,600 vendor dues, latest official figures showed.