DEEPER IN THE RED

Business Today - - THE BUZZ - – Manu Kaushik

FOR AIR IN­DIA, the sit­u­a­tion might turn from bad to worse. In the re­cently-con­cluded dis­in­vest­ment process, the gov­ern­ment could not find a sin­gle buyer for the na­tional car­rier. It is now re­view­ing its strate­gic sale process in the light of changes in the avi­a­tion sec­tor. Ac­cord­ing to re­ports, the gov­ern­ment has asked the air­line of­fi­cials to sub­mit a re­vival plan be­fore seeking fresh funds. AI has de­layed salaries of its em­ploy­ees for over three months. It posted op­er­a­tional prof­its of ` 298.03 crore in 2016/17, but due to high in­ter­est cost, re­ported net losses of ` 5,765.16 crore. But as the mar­ket sit­u­a­tion gets tougher – high fuel costs, forex fluc­tu­a­tions and ris­ing com­pe­ti­tion – there are chances that it might re­port op­er­a­tional losses in the cur­rent fi­nan­cial year. That means it will need more cash in fu­ture. Its his­tor­i­cal cash burn rate – based on the 2012-ap­proved turn­around plan – is over

` 3,714 crore. With im­pend­ing gen­eral elec­tions, an­other strate­gic sale at­tempt looks like dis­tant re­al­ity, and even the mur­murs of a pos­si­ble list­ing seem far-fetched. Though the strate­gic sale was a tacit ad­mis­sion by the gov­ern­ment that it does not have the where­withal to run AI, things have un­for­tu­nately gone back to square one.

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