The borrowings of Air India, which is facing a severe financial crunch, have more than doubled in less than two years and the airline has been now asked to prepare a restructuring plan in the next 30 days.
"The airline has been facing a financial crunch for the past few years. The borrowings of Air India have risen steeply from Rs 6,550 crore in November 2007 to Rs 15,241 crore in June this year," Civil Aviation Minister Praful Patel told Lok Sabha today.
In reply to a question, he said the borrowings have gone up largely due to servicing of debt on account of purchase of new aircraft and its operating losses which have compounded due to the present economic recession and the high oil prices last year.
He said the National Aviation Company of India Limited (NACIL) has been advised to formulate "a concrete proposal for equity induction and provision of loans".
Patel also made it clear that there was no plan to retrench any employee of Air India.
He later told reporters outside Parliament that government's support to Air India "cannot be taken for granted" and it should prepare a restructuring plan in the next 30 days.
{{/usCountry}}He later told reporters outside Parliament that government's support to Air India "cannot be taken for granted" and it should prepare a restructuring plan in the next 30 days.
{{/usCountry}}"It cannot be open ended. Government is committed...We want a strong national carrier."
Patel said there was "every reason for Air India to respond quickly. The management, the employees, all will have to come out with a proper restructuring plan".
The government, he said, wanted to know "what is needed to be implemented in the coming weeks and years".
The Minister said Air India was appointing SBI Caps as a consultant to carry out its financial restructuring plans.
To a question on whether government proposed to allow foreign airlines to invest in domestic carriers, Patel said, "The proposal to allow foreign airlines to invest in domestic airlines is under examination."