Monday, February 08, 2021

Air India's FY21 loss likely to be around Rs 10,000 crore, disinvestment plan may get affected

New Delhi: India's national carrier Air India is likely to have incurred Rs 9,500-10,000 crore loss in the current financial year, the highest since the merger of the ailing national carrier with Indian Airlines (IA) in 2007, as the pandemic led travel curbs impacted revenues of all airlines.

“Of the total, about Rs 8,000 crore is estimated to be cash losses and the rest will be on account of depreciation cost,” the Economic Times quoted an unnamed senior government official as saying.

Air India's loss is likely to impact government's disinvestment plan of the national carrier as its valuations will be impacted due to the expected loss. 

Air India's loss stood at Rs 8,000 crore in the previous financial year (FY20) compared to Rs 8,500 crore and Rs 5,300 crore loss reported in FY19 and FY18. 

According to the business daily, the airline has been raising money to fund losses and its operational costs. In the current fiscal, it plans to raise about Rs 5,000 crore through the National Small Savings Funds (NSSF) and about Rs 1,000 crore from three banks.

“We have already got Rs 4,000 crore from NSSF and the rest Rs 1,000 crore will come by the end of this fiscal,” the official told ET.

According to the budget for 2021-22, Air India will raise more than Rs 4,000 crore during the year and the money is likely to be used to fund operations of the airline.

The government has received multiple expressions of interest from companies for Air India, and it is in the process of shortlisting companies that qualify for the second phase of the bidding process.

Tata Group is believed to be the most serious bidder.


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