Mumbai/New Delhi: Air India needs to survive till it is sold, the airline’s Chairman Ashwani Lohani wrote in a Facebook post on Saturday, in a fresh plea to government for funds.
Lohani’s comment comes days after he highlighted the airline’s grim financial health in a letter to the civil aviation ministry. Over the past few months, Air India is seeking government guarantee to raise a Rs 2,000-crore loan. So far, the government has not acted on the request. The airline would default on payment obligations if capital is not raised, Lohani is said to have written in the letter.
Air India is losing Rs 150-200 crore each month despite 10 per cent year-on-year increase in revenue. Liquidity situation remains extremely tight and salary for the month of November was disbursed on December 11.
Civil Aviation Minister Hardeep Singh Puri’s recent remark that the government would shut down the airline if fails to find a buyer has also made travel agents and vendors jittery.
“Air India needs to survive till it is sold. I wonder why is it so difficult for this appreciation to sink in and also that in this environment of disinvestment, expecting a radical improvement bordering on a turnaround is an impractical thought. That output can be given sans input is a grossly impractical thought,” Lohani said in his post.
Lohani’s comment is also seen as a response to criticism from retired airline executives on his inability to turnaround the airline.
Lohani did not offer further comments. The civil aviation ministry, too, did not immediately react on the issue.
A senior finance ministry official said that according to rules of strategic disinvestment, the government doesn't infuse cash in organisations that have been identified to be sold. “There were multiple targets to be achieved as part of the turnaround plan. Air India has hardly satisfied any criteria. Staff and salary restructuring hasn't been done. Route rationalisation didn't happen despite instructions from the civil aviation ministry. The government’s resources are finite,” the official said.
15/12/19 Aneesh Phadnis & Arindam Majumder/Business Standard
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Lohani’s comment comes days after he highlighted the airline’s grim financial health in a letter to the civil aviation ministry. Over the past few months, Air India is seeking government guarantee to raise a Rs 2,000-crore loan. So far, the government has not acted on the request. The airline would default on payment obligations if capital is not raised, Lohani is said to have written in the letter.
Air India is losing Rs 150-200 crore each month despite 10 per cent year-on-year increase in revenue. Liquidity situation remains extremely tight and salary for the month of November was disbursed on December 11.
Civil Aviation Minister Hardeep Singh Puri’s recent remark that the government would shut down the airline if fails to find a buyer has also made travel agents and vendors jittery.
“Air India needs to survive till it is sold. I wonder why is it so difficult for this appreciation to sink in and also that in this environment of disinvestment, expecting a radical improvement bordering on a turnaround is an impractical thought. That output can be given sans input is a grossly impractical thought,” Lohani said in his post.
Lohani’s comment is also seen as a response to criticism from retired airline executives on his inability to turnaround the airline.
Lohani did not offer further comments. The civil aviation ministry, too, did not immediately react on the issue.
A senior finance ministry official said that according to rules of strategic disinvestment, the government doesn't infuse cash in organisations that have been identified to be sold. “There were multiple targets to be achieved as part of the turnaround plan. Air India has hardly satisfied any criteria. Staff and salary restructuring hasn't been done. Route rationalisation didn't happen despite instructions from the civil aviation ministry. The government’s resources are finite,” the official said.
15/12/19 Aneesh Phadnis & Arindam Majumder/Business Standard
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