Cash-starved AI to be refunded Rs800-cr for VVIP, special flights

New Delhi: There may be some financial relief coming cash-starved Air India's way with the government preparing to clear dues of around Rs800 crore, owed to the state-owned carrier because of expenses incurred through VVIP and other special flights operated by it on behalf of the government.

The carrier had billed the government Rs1,222 crore for dedicating five Boeing 747-400 aircraft for VVIP operations over the last five years, including the prime minister's special aircraft.

Of the total bill, maintenance costs account for Rs866 crore, capital expenditure for Rs206 crore and cash costs of Rs150 crore.

In the last five years, Air India operated 47 VVIP flights for which the Boeing 747-400s were withdrawn from commercial services for a total of 313 days, sources said.

The released amount will provide huge relief to the carrier, which today is unable to pay salaries of its employees on time. The carrier is burdened with debts of Rs40,000 crore and has accumulated losses of approximately Rs7,000 crore in 2010-11. 

Rs800 crore is being cleared towards operation of three aircraft.

The ministry of civil aviation has sent a proposal for equity infusion of Rs1,200 crore for consideration of the Cabinet, which is likely to be taken up in a week's time, according to officials.