Banks refuse to pay Rs 2,500 crore to Air India

A senior official said the banks have refused to give further support on the guarantee and hence AI wants government’s help to get out of the crisis.

Published: 27th August 2019 08:36 AM  |   Last Updated: 27th August 2019 08:36 AM   |  A+A-

Air India (Illustration | Amit Bandre, EPS)

Express Illustration by Amit Bandre, EPS)

Express News Service

NEW DELHI: Banks have refused to pay nearly Rs 2,500 crore to Air India as financial package for which the government had earlier given guarantee. It is part of the financial package of Rs 5,000 announced by the government last year. Now, the national carrier is banking upon the government for financial help. 

Air India sources said the airline has already used nearly Rs 2,500 crore out of the total guarantee given by the government last year. A senior official said the banks have refused to give further support on the guarantee and hence AI wants government’s help to get out of the crisis. The cash-strapped airline has also conveyed it to the government it would not be able to pay its employees October onwards due to its poor financial condition.

The crisis over refusal to upload fuels at the six airports remain continues.
Oil marketing companies refused uploading of fuel at selected airports by the Air India due to which Cochin-Agatti-Cochin Alliance Air flight has been cancelled and the number of passengers has been reduced in order to load more fuel. Sources claimed that if the crisis is not resolved soon, more flight might be cancelled.

The State-run oil companies have stopped supply of aviation turbine fuel at six airports — Ranchi, Mohali, Patna, Visakhapatnam, Pune and Kochi — to Air India subsidy Alliance Air over non-payment of dues.
Apart from cancellation of Cochin-Agatti flight, flights on routes Cochin-Mysore, Hyderabad-Pune, Pune-Goa, Ranchi-Raipur, Ranchi-Bhubaneswar, Ranchi-Kolkata and Chandigarh-Kullu are also affected because of delay or diversion.

Officials said Air India has mostly large-bodied aircrafts and it has started uploading more fuel for both side of journey from a particular destination. However, the operation of such aircraft may get affected if fuel supply is stopped at major airports.An official said that the financial condition of the airline has started improving, but, it is very difficult to handle the huge debt liabilities without any equity support.

Revenue figures
Air India earned Rs 25,000 crore in 2018-19, but, the expenses were around Rs 29,000 crore. Officials said AI has increased the target for 2019-20 to Rs 31,000 crore

Stay up to date on all the latest Nation news with The New Indian Express App. Download now
(Get the news that matters from New Indian Express on WhatsApp. Click this link and hit 'Click to Subscribe'. Follow the instructions after that.)

Comments

Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp