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Government decides to bail out turbulent Air India: All about the massive debt tale

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Air India Airlines, which was repeatedly going through losses, will have to sell its stakes to recover losses. Air India went through a loss of Rs 27,231 crore in 2012 and 2013 and Rs 5,765 crore loss in 2016 and 2017. As compared to the previous years, the company incurred less loss in the year 2016 and 2017.

After going through terrible losses year after year, the Government has decided to sell Air India’s 76% equity shares and transfer the management control.

The company was given a general nod by the Union Cabinet in June 2017. The cabinet gave an approval for strategic sale of the company and its subsidiaries. Finance Minister Arun Jaitley who is heading Air India-Specific Alternative Mechanism (AISAM), monitored the process of selling the airline. The aim of the ministers behind the disinvestment of the company is ‘treatment of unsustainable debt of Air India’.


The airline has a debt of over Rs 50,000 crore. The company had more than 11,000 employees, 115 air planes and served more than 36 destinations has been going through debts and losses. The airlines are being supported by the government. As reported by the Indian Express, according to provisional data provided in Parliament by the civil aviation ministry, Air India incurred a net loss of Rs 3,643 crore during 2016-17.

The company has been allocated Rs 26,000 crore from the government. With this deal of disinvestment, the company is expected to recover its losses. The company was being supported by the government under certain terms and conditions. The company is to receive Rs 36,000 crore from the government if it follows certain parameters, reported by the Indian Express.