“Of the Rs 5,000 crore due from the current year, Rs 4,600 crore is the committed equity infusion and the rest Rs 400 crore is the interest money to be paid on the Rs 7,400 crore bond issue. The government could not give Air India all the money and we are hoping that they should be able to give it next year,” said a senior ministry official.
He added that Rs 650 crore will be the interest to be paid for the bond issue next year and the rest would be the committed equity infusion for next year. Air India was to get infusion of Rs 10,600 crore for the current fiscal but the national carrier got only Rs 6,000 crore. Due to the government defaulting on its commitment, the airline plans to clear a part of its dues attracting high interest cost by borrowings from banks.
As part of the turnaround plan cleared by the Cabinet, Air India is to get an equity infusion of over Rs 30,000 crore over a period of 9 years starting from 2012-13 and get their short-term debt of Rs 18,000 crore restructured, which has already been done.
Around 60 per cent of the airline’s short-term debt has been converted into long-term and the rest is to be returned to the bank through money raised by a bond issue with sovereign guarantee.
Apart from Air India, the ministry has asked Rs 200 crore for the Airports Authority of India (AAI) and Rs 80 crore for National Aviation University. The university will award pilots and Air Traffic Controllers licences, which is currently done by the aviation regulator DGCA.
Meanwhile, business jet operators have also petitioned the ministry seeking relief from high taxes. “The high taxes imposed on the sector have majorly affected the aircraft sales over the last few year,” Business Aircraft Operators Association said.
When the infusion is of the order of 30k crores,substantial amount would go probably to wipe out the existing losses,govt should consider a separate budget for this sector in view of the necessity for making the airline a self sustaining one and also the added fear that with support available the airlines may continue it present way of operation and continue to be a liability in spite of the fact that air fares are substantially up.
why wer are wasting this much money when we dont expect any better from AI? The people who work has to change their mindset. Senior directors are only sitting to earn overtime!!!! no body works.. same govt office Babu mentality...this has to be changed and then.. they should show better feed back from constomers.. and then only govt should infuse more to them.. Tax Payers money are wasted..simply..