| Font Size |
“An equity infusion of up to Rs 1,500 crore, plus a soft loan of Rs 3,000-3,500 crore will be considered on a priority basis. There is no chance of the Airline receiving a package of Rs 14,000 to 15,000-crore package,” a very senior source in the civil aviation ministry said. “In fact, the civil aviation ministry and Air India are currently involved in the preparation of exact details and a package. It is expected to be submitted around June 22 and thereafter the government will take a final decision,” top government sources told FE on Sunday on the condition of anonymity.
On Saturday, the civil aviation ministry held initial discussions in this regard with the National Aviation Company of India Ltd (Nacil), created through Air India-Indian Airlines merger in 2007. According to sources, the situation for Air India is quite critical and the surge in crude prices to over $70 a barrel has added fuel to the fire. Though auditors are still vetting Nacil’s 2008-09 accounts, it is learnt the airline’s losses are in the range of Rs 5,000 crore instead of the expected Rs 3,000 crore.
An alarmed Nacil board had more than tripled its bailout demand from the Centre, seeking Rs 14,000 crore in equity infusion, soft loans and grants.
“The rise in fuel cost has created a major problem for our day-to-day operations as our calculations for current and future fares was based on oil prices ranging between $40 and $50 a barrel,” a newly appointed senior executive of Nacil said.
Trade experts, however, expect the government to bail out the ailing 77-year-old airline, especially at a time when the entire global civil aviation industry is passing through a rough phase.
“However, what we have gathered is that a bailout package of $1 billion or $1.5 billion (in rupee terms not more than Rs 5,000-5,500 crore) will be possible at this juncture. The government will take a final decision soon, which is quite crucial for the survival of the airline,” a representative of the governmental nominee said.
Investment banking sources say the government may even ask the airline to go in for privatisation to keep flying. Civil aviation minister Praful Patel had already said an initial public offering of shares in Air India could be considered in the near future. However, any decision in this regard will be considered once the markets revive.
Discuss this story on expressindia forums
|
|
It seems that Govt. is unable to raise sufficient fund for equity infusion, but I believe that Air India is Our National carrier and Pride too so the Govt. must find some ways to get Air India out of the crisis,but later on quality control has to be tightened in order to provide better service.
Our hard earned money goes into the drain by bailing out the worst airline in the world. The cabin crews are paid 2.5 lacs for serving tea and sleeping. The uncles and aunties better go home instead of wasting our money. The airline should be privatised . airline has the worlds largest employee aircraft ratio 1 aircraft they have 750 employees instead the world average is 100 employees. Its high time Praful Patel should take up this airline into a new phase and all the tax payers should revolt against this bailout package. Airindia doesnot even deserve a bailout of 5000 rupees forget 5000 crore
Air India is a national pride and should continue to be so. Who evacuated Indian nationals during the gulf war; who carries out HAJ flights every year by year; who flies out soldiers to Leh, Ladak etc. all this at its own cost; who hires SC/ST and backward class candidates. Don't count on the private airlines, as soon as Air India and Indian Airlines are gone they will not look back and ticket prices will go through the roof. Its a shame that Praful Patel and his chamchas (Mr. Javad CMD AI) contine to bleed the airline with free travel and at same time have vested intrests in Jet and Kingfisher.....shame on you so called Indians for giving up on Air India....even the British are smart about it!
Its a ridiculous thought to bailout AI as everyone knows thier competitiveness in the Airlines market, so even if you bail it out ..this "old and lethargic horse" will not be able to run in derby !! I think govt. will wasting Tax Payer's money even if they are given 5000 crore bailout.
Employees, beaurocrats, politions all bilk Air India for their pesonal use. Why does India need a national airline? Goverment cannot run airline and hotels. See what happens if you lose baggage with AI. Airlines business is very difficult to run, as can be seen worldwide. Air India should be sold to the highest bidder. STOP wasting tax payer money.
Indian people wants 5000cr and more money to be spent for uplifting villages and poor people.If politician's are interested in bailout, they can sell out their properties and bailout.The current AirIndia employess can be offered job in some other profit making entities.
How many time will Indian governmment waste Taxpayer money in bailing out Air India? Why do we need this white elephant?. Air India is worst service air line and Babu's runing it consider it as their personal property. it is better to sale it
I think the Govt. should go ahead and Disinvest Stakes in Air India to the maximum possible limit. I think they wont sell it, rather a Listing is on the Cards. But thats also better than doing nothing to save this Loss Making Unit.
In its present financial doom, the stupid management has doubled the salary and allowances of its butlers and waitresses to Rs., 2.5 lac a month. And that too arrears from 1997 onwards !!!!! What a shame and criminal waste of tax payers' money. That stupid Praful Patel shud be thrown out of the ministry followed by Jadhav from Air India.