Sunday, February 04, 2018

Indian gov't cuts Air India subsidy ahead of privatisation

Air India is set to receive a INR6.5 billion (USD101.3 million) subsidy from the government in the Fiscal Year 2018-2019, although the majority of these funds will be raised by Air India itself, PTI newswire has reported citing a budgetary presentation made by the government's officials.

The subsidy is less than a half of the INR18 billion which the Indian flag carrier received in the Fiscal Year 2017-2018. The cut is caused primarily by the government's intent to sell a 51% stake in Air India this year.

From the total subsidy, INR5.06 billion will come through the Internal and Extra Budgetary Resources (IEBR) mechanism. Under the terms of this scheme, all funds raised by Indian publicly-owned enterprises, either in the form of operating revenues or through external borrowing, are calculated as part of the subsidy.

Air India has not posted a net profit since 2006 and, according to PTI, accumulated over INR500 billion debt to date.
04/02/18 ch-aviation