New Delhi : Air India’s current business is ‘not sustainable’ as it is neither able to generate enough cash flow nor start repaying even the principal amount on its debt, the government has told a Parliamentary panel.
With the Cabinet giving ‘in-principle’ approval for selling stake in the loss-making Air India, a ministerial panel is working on the final contours of the proposed disinvestment. Against this backdrop, a parliamentary panel has sought details on the Air India disinvestment decision, reports PTI.
Sources said the civil aviation ministry has provided a brief overview about the factors that led to the decision to sell Air India stake to the panel. In the current scenario, Air India is not in a position to generate enough cash flow, to be in a position to start repaying principal amounts on its debt, the ministry has told the panel, according to sources.
So, with existing operations, committed fleet induction and current oil prices, the current business of Air India is not sustainable, they said quoting submission made by the ministry. The Parliamentary Standing Committee on Transport, Tourism and Culture is scheduled to hear out the government representatives on the Air India issue next month.
On June 28, the Cabinet Committee on Economic Affairs gave in-principle approval for considering strategic disinvestment of Air India and five of its subsidiaries.
Air India has a debt burden of more than Rs 50,000 crore. The previous UPA government had extended bailout package worth little over Rs 30,000 crore to the national carrier for a ten-year period starting from 2012.
