Air India picks up Rs1,000-cr funding from banks

New Delhi: Badly struggling national carrier Air India may have secured Rs1,000 crore as working capital from a consortium of banks led by the Canara Bank. The loan is being secured by the flag carrier as emergency relief to enable it continue its operations.

The emergency loan may have been secured to fend off punitive action from the three state-owned oil marketing firms which have now threatened to stop providing aviation turbine fuel (ATF) to the carrier unless previous dues of over Rs2,000 crore, including Rs1,100 crore owed to Indian Oil, were cleared.

The carrier has only recently secured Rs800 crore as additional equity from the government.

The beleaguered airline is bleeding to the tune of Rs14 crore a day. It is estimated that the National Aviation Company of India Ltd (NACIL), the holding company of Air India, will likely report a loss of Rs5,600 crore this year.

Market speculation has it that NACIL could also seek help from private equity funds should it be allowed to do so by the government.

The government has now made it clear to the carrier that it was not keen on guaranteeing additional funding till a clear road map was made available about its restructuring plans.

The ministry of civil aviation is expected to soon put up a `status paper' before the Cabinet outlining its current position.