Thursday, November 29, 2018

Govt sets Air India a target to improve financial numbers by Rs 2,000 crore annually

As part of the plan to revive Air India, the government has set a targeted financial improvements of Rs 2,000 crore per annum through savings as well as revenue enhancement, a senior aviation ministry official said today.
“Through revenue enhancement and cost savings, Air India has to show an improvement of about Rs 2,000 crore per annum. The plan has been approved by the alternate mechanism for Air India,” said aviation secretary R N Choubey.
The alternate mechanism on Air India is headed by Finance minister Arun Jaitley and has aviation & commerce minister Suresh Prabhu as its members.
As part of the plan approved by the government, about Rs 29,000 crore of debt will also be transferred to a special purpose vehicle, which will be owned by the government.
The savings through transfer of debt, which will lead to a substantial reduction in the airline’s annual interest outgo, would be over and above the Rs 2,000 crore target, Choubey added.
The alternate mechanism has also approved a 100% sale of Air India Air Transport Services (AIATSL) - the proceed of it will go in clearing a part of about Rs 29,000 crore debt that the government has taken upon itself.
29/11/18 Mihir Mishra/Economic Times
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