Air India seeks Rs 2,400 cr govt guarantee to raise funds

PTI, Dec 11, 2019, 3:06 PM IST

New Delhi: Faced with a financial crunch, Air India has sought Rs 2,400 crore guarantee from the government to raise fresh funds to mainly meet its operational requirements, according to an official.

The development comes at a time when the government is in the process of finalizing the contours for divestment of debt-laden Air India.

The official said the airline has asked for Rs 2,400 crore sovereign guarantee in order to raise money to mainly meet its operational requirements. An Air India spokesperson did not offer any comment on the issue.

On November 27, Minister of State for Civil Aviation Hardeep Singh Puri told the Rajya Sabha that interests of Air India employees would be protected and there would be no job loss till its privatization.

“Your airlines would have to be closed down, unless not privatized,” he had said.

Air India’s net loss in 2018-19 is provisionally estimated to be Rs 8,556.35 crore. The Air India Specific Alternative Mechanism (AISAM) has approved the re-initiation of a process for the sale of the government’s 100 percent stake in Air India along with Air India Express and the carrier’s stake in joint venture AISATS.

The national carrier received an equity infusion of Rs 30,520.21 crore from the financial year 2011-12 to date, the government said on December 5.

In April 2012, the then central government had approved a Turnaround Plan (TAP)/ Financial Restructuring Plan (FRP) for reviving Air India, which has been in the red since the merger of Indian Airlines in 2007-08.