Ailing national carrier Air India will get Rs 2,500 crore in 2015-16 as part of the bailout package approved by the government for bringing the airline back on track. The state-owned airline had sought budgetary support of Rs 4,277 crore from the government for the next fiscal.
As per the financial restructuring plan, the government has promised an infusion of Rs 30,231 crore into the bleeding airline by 2021 — of which the airline has received around Rs 18,000 crore.
“The amount sanctioned is below our expectation,” said an AI official. “AI will have to increase its revenues and cut down on costs,” said aviation expert Subhash Goyal. The airline is saddled with debts of Rs 40,000 crore and combined losses of Rs 36,000 crore.
“Moving towards a unified regime of the Goods and Service Tax (GST) will help in unifying taxes across the country and will be helpful to the aviation sector,” said Ajay Singh, founder, SpiceJet Ltd.
“It has been a disappointing day for aviation,” said Amber Dubey, partner and India head of aerospace and defence at global consultancy KPMG. “It is as if aviation is not even a consideration. Its wrong image as a ‘playground of the rich’ makes it a low priority item. The beleaguered industry’s long pending expectations of tax rebates on Aviation Turbine Fuel (ATF), maintenance, repair and overhaul (MRO), airports and general aviation have been ignored yet again. India’s troubled aviation sector will continue to struggle for another year,” Dubey said.