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Aviation Ministry asks FinMin to decide on Air India funding soon: Report

The airline’s operations have hit a snag due to financial problems and rising dues

September 30, 2018 / 02:53 PM IST
Air India building, Mumbai

Air India building, Mumbai

The Ministry of Civil Aviation has called on the Finance Ministry earlier last week to urgently decide on funding Air India as dues to vendors have mounted, The Economic Times reports.

The airline’s operations have hit a snag due to financial problems and rising dues. Aviation Secretary RN Chaubey wrote to the Finance Ministry to clear the bailout package, thereby ensuring infusion of funds, the report stated.

“We have asked the Finance Ministry to quickly decide on the equity infusion into Air India as the airline’s liabilities to vendors are rising and it is struggling financially,” the official told the paper.

The government has provided the airline support of about Rs 980 crore as equity and a sovereign guarantee to raise close to Rs 2,000 crore from lenders, of which Air India has raised Rs 1,500 crore.

It was reported earlier this month that oil companies have asked the national carrier to clear its dues on a daily basis. Air India has to repay about Rs 10,000 crore to oil companies and airport operators.


The Ministry of Civil Aviation was seeking a waiver of the airline’s Rs 30,000 crore debt and a cash infusion of Rs 10,000 crore. While the Finance Ministry rejected the former, the cash infusion is still under discussion. The government wants to mend the financial health of the airline for sale after 2019 Lok Sabha elections.

If the government goes through with it, this would be the second bailout package for Air India within five years. The Manmohan Singh-led UPA government in 2013 had approved an infusion of Rs 30,231 crore for the airline until 2020-21.
Moneycontrol News
first published: Sep 30, 2018 02:53 pm

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