GoI to advance Rs705 crore to Air India
02 Sep 2011
Beleaguered state-owned carrier, Air India, may receive a financial booster shot soon with the Government of India deciding to advance an ad hoc payment of Rs500 crore. The advance will help the hugely indebted carrier to partly clear its dues.
Official sources indicated Wednesday that the government would not have a problem in making the advance as provisions for Rs705 crore had been made in the Supplementary Demands passed by Parliament this Monsoon session.
They indicated that the amount would soon be released to the financially hamstrung carrier.
The government has already cleared an amount of Rs500 crore by way of clearing past dues incurred on account of VVIP travel and evacuation flights carried out by the airline.
Air India estimates that about Rs613 crore are owed to it by various ministries, government departments and agencies, apart from the cost of maintenance of aircraft taken out of the operational fleet for VVIP operations.
The national carrier has been burdened with huge fixed costs, such as high expenditure on insurance, interest on working capital, aircraft loan and leasing of aircraft. It has found it difficult to make on time salary payments to staff.
It is being given to understand that an amount of Rs373 crore has already been collected by the government from some ministries and departments on account of operating chartered VVIP flights, the sources said.
The airline, which is burdened by an accumulated loss of Rs20,320 crore, has outstanding loans and dues of Rs67,520 crore -- of which Rs21,200 crore is working capital loan, Rs22,000 crore is the long-term loan on fleet acquisition and Rs4,600 crore vendor dues, latest official figures showed.
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