‘AI needs Rs 43,255 cr to stay afloat’

New Delhi: The government may soon have to decide whether it can afford to keep national carrier Air India (AI) alive. The airline will require an equity support of Rs 43,255 crore over next 10 years to keep flying, according to a new revival plan prepared by SBI Caps. Out of this, Rs 8,372 crore is required in 2011-12— Rs 6,600 crore to meet immediate requirements and Rs 1,772 crore to pay back aircraft loans.
While AI has liabilities of over Rs 47,000 crore at present, it is on the verge of defaulting on aircraft loan payment too. Out of Rs 43,255 crore equity support, Rs 6,600 crore is required upfront; Rs 6,071 crore to bridge cash deficit till FY18 and Rs 30,584 crore for paying back guaranteed aircraft loans till 2021.
Aviation ministry sources say they are unlikely to request the government for Rs 43,255 crore equity support. "We have to take a call on fleet size by deciding on the 27 Boeing 787 Dreamliners ordered whose deliveries have not begun. We are likely to seek Rs 3,000 crore every year for AI over next 10 years," said sources.
Considering the poor health of the airline due to questionable decisions of UPA-1 to order 111 new planes worth almost Rs 50,000 crore for an airline that had an equity base of Rs 145 crore then and merger of AI with Indian Airlines, there's no light at the end of the tunnel for AI in ashort period of time despite the projected infusion. The revised turnaround plan projects that the airline will have a negative net worth and make losses till 2017-18.
30/06/11 Saurabh Sinha/Times of India

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Categories: Air India Jun 2011