ADDITIONAL BUDGETARY SUPPORT FOR AIR INDIA
In the current financial year i.e. 2016-17, the national carrier Air India will get only ` 80 crore as additional budgetary support from the government. This is much less than the airline’s demand of ` 2,200 crore. Air India is on a bailout package of ` 30,000 crore sanctioned earlier by the government of which the airline has received ` 23,993 crore in equity including ` 1,713 crore investment so far.
The allocation this year has been curtailed despite the fact that Ashwani Lohani, Chairman and Managing Director of Air India, had written to the government that on account of the airline’s huge debt burden, reduced funding by the government might derail the turnaround process of the airline and put its expansion plan in jeopardy. The national carrier has a debt burden of ` 46,000 crore and has annual interest liability of around ` 4,000 crore. The challenge before the airline is reducing the debt burden. High interest and maintenance expenses have resulted in the airline posting a net loss of ` 3,837 crore in FY16.