- The government of India offered Air India a loan approx. ₹23,286 against its aircraft.
- The government has invited bids to sell a 100% stake in AI for 2nd consecutive time.
Air India, the debt-ridden airline carrier is still struggling to take off once again. While there were hopes to gain momentum as the new year kicked off, but it didn’t work out as planned.
It’s the 2nd time the government of India tried to offer help AI by offering 100% deal but investors are just not interested to take this debt-ridden aircraft company. Which is why the government is willing to bring the debt down to about ₹23,286/- from ₹62,000/-
The debt with the company is against aircraft purchases, which are against government guarantees but those guarantees would lapse once the airline is purchased by someone new.
In 2018, the government invited bids for 76% sale in the company but the proposal did not attract any bidder. This year also, 3 lenders were said to express their interest in buying the airlines and reducing the debt by 15th Jan but due to ongoing debate between parties and authority, it never happened.
Realizing this, the government is now willing to go a step further to help the debt-ridden airline carrier. In its current offer, the government has reduced debt liabilities of the airline by ₹29,400 from ₹62,000 crores and will further reduce it to ₹ 9300 cores of the total debts.
The airline carrier having liabilities of ₹ 22000 crores will be sold with a massive reduction in liabilities this time. Sources mentioned that the government will take away liabilities due to the Income Tax Department, customs, services tax and penal charge due to the government of India.
“Ever since aviation minister HS Puri made a statement in Parliament on 27th November last year, AI will shut down if now sold off, everyone we owe money to has been asking for payment. We have reached a stage where it is becoming very difficult financially to continue. We need continued services/supplies as a functional airline but people are now saying clear or reduce past dues first” – a source said.
While passenger bookings have dropped given the uncertainty of our debt-ridden airline carrier’s fate, even employees are getting increasingly restive now. All unions met in Mumbai on Thursday to decide what they should do now.
Air India’s pilots have already asked the government to waive off their notice period and allow them to leave so that they can go for another job hunt.
Air India the debt-ridden airline carrier is still struggling to take off once again. However, their problems are still unresolved even after entering 2020.
Earlier, while the government was searching for some deep-pocketed investor who would wash away all their debts, but they were living in a fairy-tale. Having realized this, now the government is ready to waive off some parts of AI’s debt.
Now we have to see when we get an investor or a company to bring back life in our debt-ridden aircraft carrier Air India.