Air India loss Rs 15 crore a day

New Delhi: Air India's already precarious financial health appears to be worsening.According to official sources, the airline is losing Rs 14-15 crore every day or close to Rs 5,400 crore a year!
Of the Rs 16,000 crore working capital limit, Rs 15,200 crore has already been exhausted... so the cash available in hand is only Rs 800 crore.This, when there are firm payout commitments of Rs 1,400 crore for buying fuel, to Airport Authority of India, vendors and others. It is perhaps this cash shortfall that had led the airline to defer payment of June salaries to its employees for the first time in the airline's history.
Newly appointed chairman and managing director Arvind Jadhav is grappling with the failing health of the national carrier amid reports that any kind of financial help from the government is unlikely to materialise soon -- at least not in the upcoming Union Budget.
"There is no proposal with the Ministry of Civil Aviation till today on what and how much AI needs. Once we get it, the proposal would have to be scrutinised and then passed on to the finance ministry.....it is unlikely that any financial assistance can be given in the Budget this time," sources said.
However, there is still a chance that the money may be given while computing revised estimates for the Budget.
But how much is the airline going to seek? Initially, it had sought a total of about Rs 4,000 crore, including equity infusion and soft loan components. But this proposal was subsequently withdrawn.
Now that losses have climbed further, Air India appears to be readying a much larger demand package that could be between Rs 12,000-15,000 crore.
17/06/09 Sindhu Bhattacharya /Daily News & Analysis

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Categories: NACIL Jun 2009