Wednesday, March 06, 2019

Air India needs Rs 12,000 crore to pay debt in next fiscal

New Delhi: Next fiscal will be a crucial one for Air India as Rs 8,000 crore of aircraft purchase loan have to be paid off then. While almost half of AI’s total loan of over Rs 55,000 crore is being transferred to a special purpose vehicle to reduce its annual debt servicing of Rs 4,500 crore, the airline will in all need to pay Rs 12,000 crore towards paying off loans — Rs 4,000 crore of working capital and rest aircraft purchase loan — in FY 2019-20.

“Next year AI will need support from the government to pay off this huge debt burden. From the fiscal 2020-21, AI’s annual debt servicing will be in the manageable range of Rs 1,500-2,000 crore. We can be in operating profit from FY 2021,” said a source.

The airline is currently also trying to somehow raise funds as 23 of its aircraft, a mix of narrow and wide body, are not flying for want of engines. The government may issue bonds to make some funds available to AI and help its meet its urgent requirement like putting engines on lanes to make them fly!

Once the grounded aircraft are back in service, AI has drawn up plans for where they will be utilised. The airline’s chairman Ashwani Lohani told TOI a direct connection “to Los Angeles from this winter will be seriously looked at.” The airline’s Delhi-San Francisco (SFO) connection, currently the only direct flight on the route, is a big hit. Started by Lohani in 2015 as thrice weekly, today the airline flies nine times a week on Delhi-SFO and yet flights for coming summer break are fast selling out.
06/03/19 Saurabh Sinha/Times of India