Government may not infuse capital once Air India is privatised

The government may not infuse about ₹21,000 crore in the promised equity into Air India Ltd once the state-owned airline is privatised, a top official said. Air India was promised ₹50,000 crore in equity infusion until 2032 by the previous UPA government in 2012 to bail out the airline weighed down by accumulated losses and debt.

Of the ₹50,000 crore, Air India has already received nearly ₹27,000 crore, including ₹1,800 crore this fiscal year. An amount of ₹1,800 crore is earmarked for infusion in the carrier in the next fiscal, the year in which the airline is likely to be privatised in line with the current road-map of the government, said a government official who did not wish to be named. The numbers can change depending on the sale process, the official added.

This will mean the new owner of the airline will not get the promised ₹21,000 crore of equity.

“I don’t think government of India will inject equity in a privatised airline,” civil aviation secretary RN Choubey said on the sidelines of a press conference on Tuesday. Air India had debt of ₹48,877 crore at the end of March 2017, of which about ₹17,360 crore were aircraft loans and ₹31,517 crore were working capital loans.

The airline has vast assets including intangibles like airport slots and international flying rights, among other things. It also has valuable real estate globally. The airline has about 17% share of traffic on routes linking India to international destinations and 13% of the domestic market.

NEW DELHI: