Air India Outlines Debt Plan

Mumbai: Air India has current outstanding long-term debt of about $5 billion (233 billion rupees) and is considering several steps including selling non-core assets to improve its balance sheet, said a senior executive at the loss-making carrier.
Of the total debt, the airline has to repay about 18 billion rupees this year and the same amount next year, S. Venkat, Air India's executive director of finance, told The Wall Street Journal.
Heard on the Street
A possible option Air India is exploring to ease the debt burden "is restructuring and refinancing of rupee-denominated loans," Mr. Venkat said.
Air India has been incurring losses since 2007, mainly because of the global economic downturn and federal government policies that forced the airline to operate on unprofitable domestic routes, as well as offering liberal air-traffic rights to foreign carriers, which increased competition for the state-run airline.
A merger with erstwhile Indian Airlines in 2007 and the burden of a $15 billion order for 111 aircraft placed with Boeing and Airbus in 2005 also added to Air India's woes.
17/06/10 Harsh Joshi and Anirban Chowdhury/Wall Street Journal

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Categories: NACIL Jun 2010