Air India gets Rs. 927 crore breather, banks shy away
The center has pumped in another Rs. 927 crore in Air India this month, keeping its promise of fund infusion made almost a decade ago. It'll continue to do so until Air India goes through disinvestment process. It is a life saver for Maharaja, as it had to delay salaries of some of its employees due to a severe cash crunch. Here's more.
No loans for the Maharaja
State-owned banks have shied away from extending loans to the embattled state-run airlines, as it's on its way to be privatized. Air India has urged its parent ministry i.e. the Ministry of Civil Aviation to speak to the finance ministry for assistance in the matter of loans. An Air India official told Mint that this infusion will help with Air India's liquidity.
The money situation
The Maharaja has received Rs. 25,000 crore as equity from the government since 2012. It's to be noted that out of the Rs. 2,587 crore that AI was promised during this financial year, it has already received Rs. 1,633 crore. Currently, AI has a monthly shortfall of Rs. 400 crore and banks are unwilling to lend a helping hand due to its privatization plans.
Enough to keep it afloat
The aviation ministry said that it'll honor the financial obligation that's been made to AI as per the approved turnaround plan. Ideally, this should keep the Maharaja more than afloat until its disinvestment. On 28th June, the Cabinet Committee on Economic Affairs (CCEA) convened and gave their nod for considering strategic disinvestment of AI and its 5 subsidiaries and appointed advisors for the same.
