For the second straight year, the Union Budget has failed to meet Air India’s expectations. For 2013-14, the airline was allocated Rs 5,000 crore of equity infusion, against the demand of Rs 8,574 crore, sources told Business Standard. This would hit the timely payment of dues to vendors, as well as the carrier’s revival.
Last year the Cabinet had approved a turnaround plan for Air India and sanctioned equity infusion of Rs 30,000 crore over a period of eight years. The government had also agreed to give a guarantee for the airline’s debt restructuring plan.
This financial year, Air India had expected infusion of Rs 11,014 crore. However, it received only Rs 6,000 crore. For 2013-14, it had sought Rs 3,564 crore in addition to the Rs 5,000 crore it hadn’t received this financial year.
Air India’s total debt stands at about Rs 43,000 crore. It also has dues worth hundreds of crores to oil companies, airports and vendors. Last December, the government had said Air India owed Rs 4,064 crore to oil companies.