The government’s premier policy advisory body NITI Aayog has said in its report on the debt-laden Air India that it was “unviable” to provide financial support to the national carrier, the Centre told Parliament on Tuesday. Air India has a debt of Rs 51,890 crore. The government has initiated a process for strategic disinvestment of Air India as part of efforts to revive the national carrier.
As part of a turnaround plan approved by the previous UPA dispensation, Air India was to receive a bailout package of up to Rs 30,231 crore for a period of 10 years, starting in 2012. “NITI Aayog in its report on Air India has stated that further financial support to an unviable non-priority company in a matured and competitive aviation sector would not be the best use of scarce financial resources of the government,” Minister of State for Civil Aviation Jayant Sinha told the Rajya Sabha in response to a question.
The total outstanding loans of Air India as on September 30 last year stood at Rs 51,890 crore as per provisional figures. Of this, the aircraft loans account for Rs 18,364 crore and the working capital loans were at Rs 33,526 crore. In 2016-17, the airline had a net loss of Rs 3,643 crore,
while the operating profit rose to Rs 215 crore, the provisional figures showed.
The embattled carrier has received around Rs 26,000 crore under the UPA-sanctioned bailout package. In June this year, the Cabinet Committee on Economic Affairs gave its in-principle nod to the strategic disinvestment of the airline. A ministerial group is now working on the disinvestment modalities, including the treatment of Air India’s unsustainable debt, hiving off of certain assets to a shell company, demerger and strategic disinvestment of three profit-making subsidiaries.