Saturday, September 29, 2018

Aviation Ministry writes to Finmin on Air India distress call

New Delhi: Things aren’t getting better for debt-laden Air India as dues to vendors have hit unmanageable levels, forcing the aviation ministry to write to the finance ministry asking it to urgently decide on funding the national carrier.

The letter, sent earlier this week, said that the airline is finding it difficult to conduct operations due to financial problems and rising vendor dues. Aviation secretary RN Chaubey called on the finance ministry to clear the bailout package to ensure funds could be infused quickly, said a senior aviation ministry official, who did not want to be identified.

“The airline is not able to manage it because there are enough dues to be paid to various vendors,” said the official, “We have asked the finance ministry to decide quickly on equity infusion into Air India, as the airline’s liabilities to vendors is rising and the airline is struggling financially.”

Air India has been seeking government help to clear its dues to foreign and Indian lenders apart from vendors. The government has provided interim support of about Rs 980 crore as equity and provided a sovereign guarantee to raise Rs 2,000 crore from banks. Of this, Air India has already raised Rs 1,500 crore.
29/09/18 Mihir Mishra/Economic Times