With less than a month left for Air India’s loans to become non-performing assets (NPA), the civil aviation ministry issued a statement on Friday saying the “government attached utmost importance to the credible revival of AI”.
How the government plans to turn around a bleeding carrier that owes around Rs48,000 crore in loans and payments to vendors is not clear.
Hindustan Times on Friday reported that AI has defaulted on payments. Banks have stopped lending and in the event of a default, government guarantees would be triggered, affecting the credibility of the sovereign.
AI’s loans will become NPAs by July-end if the minimum interest is not paid. After this, banks may sell off its assets that it had pledged to secure the loans and freeze its accounts, bringing operations to a halt.
According to a revival plan prepared by SBI Caps, AI would require over Rs43,000 crore over the next 10 years — Rs8,000 crore in 2011-12 itself.
HT has learnt that AI’s independent directors pointed out at a board meeting last week that the main issue was not AI’s financial health but the capability of its management to implement a turnaround plan.
While Jitender Bhargav, former executive director, AI, called the situation “grave”, aviation expert Capt Mohan Ranganathan said AI’s “present management, under whom its losses multiplied, was its main problem”.