National Aviation Company Ltd (Nacil), which runs Air India, is unhappy over the civil aviation ministry deducting a part of the money given by the government for infusion of equity capital in the company and instead giving it to Airports Authority of India (AAI) to clear a portion of the state airline’s dues.
The Group of Ministers (GoM) monitoring the revival of AI had cleared an equity infusion of Rs 800 crore in the beleaguered carrier, reeling under losses of over Rs 7,200 crore, in two equal instalments.
Of the first instalment of Rs 400 crore, the airline received only Rs 325 crore. The other Rs 75 crore was used by the ministry to part-clear AI’s dues to AAI, for using its various airports and infrastructure across the country.
“What is the point in giving us the money when the ministry, without consulting us, gave the money to the airport operator, leaving no scope for us to negotiate with the operator?” complained a senior airline official, who did not want to be identified.
The official said the next instalment was to come this month and “we do not know how much we will actually get, leaving us a bit confused over our future strategy”.
The airline owes AAI another Rs 550 crore and has dues to the three public sector oil companies (IOC, HPCL, BPCL) of Rs 2,000 crore. Its monthly cash deficit is Rs 400 crore. It has sought Rs 5,000 crore from the government to increase its debt-raising capacity. Its current equity base is Rs 145 crore.
The official also said the government had created confusion over the future of Air India: “On the one side, it seems that the government is serious about the functioning of Air India but on the other, there are reports that the airline should be demerged. Because of this confusion, our and the airline’s fate is at stake.”
In the Budget proposals, the government had cleared Rs 1,200 crore as equity infusion in the next financial year, 2010-11. Air India, as well as Air India Express, had also projected a substantial decrease in non-plan expenditure.