Risky flight plan

AI's bond market plan does not address core concerns

The government’s reported plan to raise Rs 22,000 crore for Air India via the bond market is fraught with risks. The broad objective of this big-bang fund-raising exercise is to help the state-owned carrier improve its financials ahead of a second attempt to sell the airline. The loss-making airline owes foreign and Indian lenders Rs 58,000 crore, and this amount, which will be raised in two tranches of Rs 7,000 crore and Rs 15,000 crore, will be used to part-pay creditors without resorting to financing via the Government of India’s Budget.
 
Three issues raise doubts about the wisdom of