New Delhi : As the government works on ways to turnaround Air India, Civil Aviation Minister Suresh Prabhu has said that the national carrier has “unsustainable debt” and legacy issues need to be dealt with.
Loss-making Air India is estimated to have a debt burden of more than Rs 48,000 crore and the government’s efforts for strategic disinvestment of the carrier failed in May. “Air India is very clearly a legacy issue. Air India’s debt is unsustainable. Forget Air India, nobody can handle that debt. For any airline to service that debt is not possible,” Prabhu said. The best way is to look at how to deal with the legacy issue, he added. Air India has been making losses since the merger with Indian Airlines in 2007.
As per its audited accounts, the airline’s accumulative losses stood at Rs 47,145.62 crore in 2016-17. High interest burden, rise in competition, high airport user charges, adverse impact of exchange rate variation and liberalised bilaterals to foreign carriers leading to excess capacity in the market are among the reasons for the losses, according to the Civil Aviation Ministry. A revival strategy is being worked out as the government aims to make the airline “competitive” before making a fresh push for disinvestment. On Tuesday, a senior Finance Ministry official said the government was looking at transferring Air India’s non-core assets and “unsustainable debt” to a special purpose vehicle as part of measures to revive the national carrier.
Allowance of pilots cleared
New Delhi: After a delay, Air India has paid flying allowance for June to its pilots, a section of whom had threatened to stop operations last week if the dues were not cleared immediately. “The allowance for the month of June has been paid by the airline on August 20,” an Air India spokesperson said. Citing rules, sources said flying allowances are paid after two months and the dues for June should have been paid on August 1.