AI’s biz plan not sustainable: Centre

New Delhi, July 31: Air India’s current business is “not sustainable” as it is neither able to generate enough cash flow nor start repaying even the principal amount on its debt, the government has told a Parliamentary panel.

With the Cabinet giving “in-principle” approval for selling stake in the lossmaking Air India, a ministerial panel is working on the final contours of the proposed disinvestment.

Against this backdrop, a parliamentary panel has sought details on the Air India disinvestment decision.

Sources said the civil aviation ministry has provided a brief overview about the factors that led to the decision to sell Air India stake to the panel.

In the current scenario, Air India is not in a position to generate enough cash flow, to be in a position to start repaying principal amounts on its debt, the ministry has told the panel, according to sources.

So, with existing operations, committed fleet induction and current oil prices, the current business of Air India is not sustainable, they said quoting submission made by the ministry.

The Parliamentary Standing Committee on Transport, Tourism and Culture is scheduled to hear out the government representatives on the Air India issue next month.

On June 28, the Cabinet Committee on Economic Affairs gave in-principle approval for considering strategic disinvestment of Air India and five of its subsidiaries.

Sources said the move came after taking into consideration recommendations made by government think tank Niti Aayog and the core group of secretaries on disinvestment.

— PTI The government has ordered state-run oil companies to raise subsidised LPG prices by `4 per cylinder every month.

Oil minister Dharmendra Pradhan said, “Public sector oil marketing companies (OMCs) were authorised to increase price of subsidised domestic LPG cylinder by `2 per cylinder (14.2-kg) per month (excluding VAT) with effect from July 1, 2016,” he said.

Oil companies had hiked LPG rates on 10 occasions since that go-ahead.

“The government vide its order dated May 30, 2017, has again authorised OMCs to continue to increase the effective price of subsidised domestic LPG by `4 per cylinder effective June 1, 2017, per month (excluding VAT) till the reduction of government subsidy to ‘nil’, or till March 2018, or till further orders, whichever is earliest,” he said.

Oil companies have raised rates twice since then, the last being on July 1 when rates were up by a steep `32 per cylinder — the steepest increase in six years. This hike was because of the May 30 order as well as reflection of hiked tax rates under the GST regime.

Subsidised LPG now costs `477.46 per 14.2-kg cylinder in Delhi. It was priced at `419.18 in June last year. The rate of nonsubsidised LPG, which consumers pay after exhausting their quota of below-market priced bottles, costs `564. “The price for the other subsidised cylinders (i.e. 5 kg) would be increased proportionately by the OMCs,” Mr Pradhan said.

The subsidy on LPG was `86.54 per cylinder for July, he said.

There are as many as 18.11 crore customers of subsidised LPG in the country. These include 2.5 crore poor women who were given free connections during the last one year under the Pradhan Mantri Ujjwala Yojna.

■ IN A report submitted to the government in May, Niti Aayog had proposed strategic disinvestment of Air India on various grounds, including the airline’s financial situation