Monday, May 15, 2017

Mountain of debt appears insurmountable: AI chief

New Delhi: Its total debt of close to Rs 50,000 crore is proving to be "insurmountable" for Air India even as the Maharaja makes operational improvement in recent years. The airline management has blamed decisions taken by previous governments for the current state of the airline.
AI chairman Ashwani Lohani on Sunday, in a Facebook post, said, "AI went down due to the ill fated decision of the merger of two organisations ... coupled with many other wrong decisions of the earlier regime. Of course gross mismanagement at the senior management levels of the company played its part in the rapid downward slide too, but isn't appointing senior management functionaries the function of the governments?"
Stating that the airline has the "finest" employees, including pilots, cabin crew, engineers and others, Lohani's post says, "Yet the mountain of debt that we acquired appears unsurmountable (sic) and is at the root of all the problems that manifest as symptoms to all and sundry."
AI has loans of Rs 48,400 crore, including working capital and term loans of Rs 22,000 crore, aircraft-related debt of Rs 19,000 crore, and Rs 7,400 crore that it had raised via non-convertible debentures (NCDs). The airline has been trying to get lenders to cut the interest rate on loans of Rs 10,500 crore, on which it pays 10.1%. The debt servicing alone comes to about Rs 4,000 crore per annum for the airline.
Senior aviation minister A G Raju has often askd that even if the government decides to privatise AI, who will buy it given its size of liabilities? Raju's deputy Jayant Sinha has been trying to find innovative ways of refinancing AI's debt, including asking it to speak to LIC for the same.
15/05/17 Saurabh Sinha/The Times Of India