Air India has no respite from rising govt dues on VVIP travel

16 Apr 2015


The Narendra Modi government has amassed Rs317 crore in air travel expenses in the first year of operation, Rs59 crore more than the Rs258 crore that the UPA-II government had incurred in its last year in office (2013-14).

With VVIP travel increasingly burdening the national carrier, the civil aviation ministry is reported to have taken up the issue with various ministries regarding the pending amount related to the services of Air India aircraft availed for such VVIP travel.

Reports say the civil aviation ministry is now pursuing Rs600 crore that various ministries, including the ministries of home affairs and external affairs, owe for using its aircraft for ferrying VVIPs.

These ministries owed Air India "Rs500-600 crore" in travel dues till 3 March 2015, according to reports.

With mounting losses and government refusing to pay up travel dues, Air India is surviving on a bailout package approved by the erstwhile UPA government in April 2012.

The turnaround plan includes a committed public funding of Rs30,231 crore, staggered over a period of nine years, with some specific riders.

Air India, which is sitting on a debt pile of Rs40,000 crore, had reported losses to the tune of Rs5,388 crore in FY-14 against Rs5,490 in the fiscal 2012-13.

The national carrier had reported a net profit of Rs14.6 crore in December last year, against a loss of Rs168.7 crore in the corresponding period of 2013.

The airline last month forecast that it would become operationally profitable by March next year, despite the huge debt burden.

But that could be due to the micro-economic situation, including the fall in oil prices, since 2012, when the government had approved its turnaround plan. The airline is also leasing back and even outright sale some of its aircraft to reduce losses.

Meanwhile, the Air India board last week refuted possibility of privatising Air India, saying such an idea would be "premature" at this stage even as they said there was a need to re-visit its turnaround plan in view of the changing micro-economic situation.

"It would be too early to talk about privatisation of Air India at this stage. What you actually need is a complete re-look at the airline's revival plan and then decide whether it should remain with the state or go to private hands," reports quoting airline sources said.

The comments came in the backdrop of media reports that some of the AI independent directors were pushing for its privatistaion and had even communicated their views to the civil aviation minister Ashok Gajapathi Raju recently.

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