Representational photo.

NEW DELHI: Air India remains in the throes of a life-threatening fund crunch. A group of secretaries of different ministries had met earlier the week where it was decided to extend Rs 2,000-crore sovereign guarantee to the airline. However the same has not yet been given to AI, making things “very tough” to continue, say officials.

“It was decided to extend sovereign guarantee that would enable us to raise Rs 2,000 crore loan and continue operations till the fate of the second divestment move is known. But we are yet to get the guarantee and that has added to our woes,” said a senior official.

The airline had been seeking either equity or a guarantee from the government for some time now as it has virtually run out of funds to continue operations. AI has a total debt burden of close to Rs 74,000 crore. While the government has not made any equity infusion into the airline this fiscal, it has taken off Rs 29,464 crore debt burden from AI and allocated that to a special purpose vehicle, AI Asset Holding Ltd, along with some assets. “Of the remaining debt, we are finding it hard to do debt servicing of close to Rs 225 crore per month. That is the shortfall between our expenses and income,” said sources.

“Ever since aviation minister H S Puri made a statement in Parliament on November 27, 2019, that ‘AI will shut down if not sold off,’ everyone we owe money to has been asking for payment. We have reached a stage where it is becoming very difficult financially to continue. We need continued services/supplies as a functional airline, but people are now saying clear or reduce past dues first,” said people in the know.

While passenger bookings have dropped given the uncertainty surrounding AI’s fate, the airline employee are getting increasingly restive now. All unions met in Mumbai on Thursday to decide what they should do now. Sources say the option of taking AI to National Company Law Tribunal (NCLT) to get their dues or a strike were discussed. A final call is yet to be taken.

AI pilots have already asked the government to waive off the notice period requirement for them and allow them to leave so that they can get a job elsewhere.

