Desperate Air India eyes rescue as creditors circle above

National carrier Air India, which is struggling to clear its dues, can expect over Rs 2,121 crore that it has asked from the government on a priority basis only after August, sources said. The airline has been served notices by at least three banks and two lessors for non-payment of their dues, according to a media report.

The Air India management has been left in a lurch after the airline failed to attract any bidders for its privatisation. The central government has, at present, shelved the plans of selling the debt-laden carrier and assured its management that required capital will be infused to keep Air India running till it is turned around or sold.

However, as the amount has still not been allotted to the airline, the management is finding it difficult to handle even the basic expenditures for daily operations and has not been able to pay the vendors, bankers, lessors on time. Even the salaries of its employees are regularly getting delayed, which has irked the employees, the insiders said.

Air India owes about Rs 1,800 crore to its vendors, banks and lessors that have demanded payment from the ailing airline.

According to a media report, San Francisco-based Wells Fargo Trust Services and UAE's state-owned Dubai Aerospace Enterprise (DAE) have sent letters of demand for pending rental payments. Three lenders from a 22-bank consortium have also written to Air India, raising concerns that the company is turning into a non-performing asset. The three banks are Standard Chartered Bank, Dena Bank and Bank of India Ltd, the report added.

Air India, with a debt of over Rs 55,000 crore, has been on life support from the government, under which it was assured of receiving Rs 30,000 crore as part of the turnaround plan for 10 years. The airline is currently said to be losing about Rs 10 crore every day.

The loss-making carrier has already received over Rs 26,000 crore under the bailout package.

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Turbulent Times

• The airline is finding it difficult to handle even the basic expenditures 
• The salaries of its employees are regularly getting delayed
• Air India owes about Rs 1,800 cr to vendors, banks and lessors
• Over Rs 55,000 cr Air India’s total debt
• About Rs 10 cr The airline is said to be losing every day

Source: DNA Money