Agree with aviation ministry's concern on likely default in payments and loans if cut of Rs 1,777 crore in this year's equity infusion isn't reversed
The troubles for government-owned Air India (AI) could deepen in 2015-16 if it doesn’t get the expected infusion of additional capital.
The Union civil aviation ministry told a parliamentary panel recently that AI could default on repayment of loans taken for aircraft purchase if it did not get the entire expected equity infusion. And, that this could mean a series of delayed payments to oil companies, the Airports Authority of India (AAI) and on repayment of interest on the government-guaranteed debentures. The ministry said so to the standing committee on transport, tourism and culture.
In this year’s Union Budget, Finance Minister Arun Jaitley had made a provision of Rs 2,500 crore for AI as additional equity infusion, against the airline’s demand of Rs 4,277 crore. The government stated no reason for the cut. After this, AI wrote to Jaitley’s ministry to have the remaining Rs 1,777 crore restored. It has yet to happen.
05/05/2015 Somesh Jha/Business Standard
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The troubles for government-owned Air India (AI) could deepen in 2015-16 if it doesn’t get the expected infusion of additional capital.
The Union civil aviation ministry told a parliamentary panel recently that AI could default on repayment of loans taken for aircraft purchase if it did not get the entire expected equity infusion. And, that this could mean a series of delayed payments to oil companies, the Airports Authority of India (AAI) and on repayment of interest on the government-guaranteed debentures. The ministry said so to the standing committee on transport, tourism and culture.
In this year’s Union Budget, Finance Minister Arun Jaitley had made a provision of Rs 2,500 crore for AI as additional equity infusion, against the airline’s demand of Rs 4,277 crore. The government stated no reason for the cut. After this, AI wrote to Jaitley’s ministry to have the remaining Rs 1,777 crore restored. It has yet to happen.
05/05/2015 Somesh Jha/Business Standard
