AI may get ₹2,345 cr as part of revival bid

AI WILL GET ₹2,345 CR OF EQUITY INFUSION, OF WHICH ₹2,299 CR IS EXTRA CASH OUTGO FROM THE EXCHEQUER, SHOW GOVT DOCUMENTS

NEW DELHI: The government on Thursday sought Parliament’s approval for infusing ₹2,345 crore of equity into debt-laden national carrier Air India, which is on a revival plan.

The infusion, which will help Air India manage its operational expenses, comes after the government decided in November to transfer a little over half of its ₹55,000 crore debt as well as noncore assets into another company as part of a restructure. The idea is that once the interest burden is out of Air India’s books, it will be able to keep expenses under control and focus on attaining efficiency. Air India will get ₹2,345 crore of equity infusion, out of which ₹2,299 crore is the extra cash outgo from the exchequer, while the remaining is managed by savings, according to a government document tabled in Parliament seeking permission to spend more than the amount budgeted for this fiscal.

The infusion will help the company meet its operational costs, though it is yet to receive from the government the modalities of utilizing the funds, according to an Air India official. High debt, competition from low-cost airlines and high cost of operations were among reasons that led to the company’s decline.

“We have been taking steps to make the airline viable by adding new sectors and services. In November, we have started several night services such as those from Delhi to Coimbatore and Goa,” said the official on condition of anonymity.

That comes in the wake of a decline in the company’s utilization of its capacity since the beginning of this year.

The equity infusion in Air India is part of a total additional gross spending of ₹85,949 crore the government wants to spend this fiscal for which it sought Parliament’s approval.