NEW DELHI: As the government works on tactics to turnaround Air India, civil aviation minister Suresh Prabhu has stated that the nationwide carrier has "unsustainable debt" and legacy issues want to be dealt with.
Loss-making Air India is estimated to have a debt burden of greater than Rs 48,000 crore and the government's efforts for strategic disinvestment of the carrier failed in May.
"Air India is very clearly a legacy issue. Air India's debt is unsustainable. Forget Air India, nobody can handle that debt. For any airline to service that debt is not possible," Prabhu informed PTI in an interview.
The best means is to have a look at care for the legacy issue, he added.
Air India has been making losses since the merger with Indian Airlines in 2007.
As in keeping with its audited accounts, the airline's accumulative losses stood at Rs 47,145.62 crore in monetary year 2016-17.
High passion burden, build up in festival, prime airport consumer fees, antagonistic impact of alternate price variation and liberalised bilaterals to international carriers leading to excess capability out there are a number of the major reasons for the losses, according to the civil aviation ministry.
A revival strategy is now being labored out as the government targets to make the airline "competitive" prior to making a recent push for disinvestment.
On Tuesday, a senior finance ministry legitimate stated the government was taking a look at shifting Air India's non-core property and "unsustainable debt" to a special objective vehicle as a part of measures to restore the nationwide carrier.
The airline is staying afloat on a bailout package extended by the previous UPA regime in 2012.
In the current monetary year, the airline has won an fairness infusion of Rs 650 crore up to June. A Turnaround Plan (TAP) and a Financial Restructuring Plan (FRP) had been licensed for Air India in 2012.
Last month, the government sought Parliament's nod for Rs 980 crore as supplementary grants for fairness infusion into the airline.
Earlier this month, the ministry informed the Rajya Sabha that the government remains dedicated to the disinvestment of Air India however has no plan to exit the nationwide carrier altogether.
About the situation of home carriers, Prabhu stated that each time the fuel costs pass up, the airways get badly affected because this is a variable cost and can't be absorbed into trade model immediately.
"Now, we will have to work on it. Not only India but globally. Some of the global airlines are facing serious problems," he stated all through the interview.
Loss-making Air India is estimated to have a debt burden of greater than Rs 48,000 crore and the government's efforts for strategic disinvestment of the carrier failed in May.
"Air India is very clearly a legacy issue. Air India's debt is unsustainable. Forget Air India, nobody can handle that debt. For any airline to service that debt is not possible," Prabhu informed PTI in an interview.
The best means is to have a look at care for the legacy issue, he added.
Air India has been making losses since the merger with Indian Airlines in 2007.
As in keeping with its audited accounts, the airline's accumulative losses stood at Rs 47,145.62 crore in monetary year 2016-17.
High passion burden, build up in festival, prime airport consumer fees, antagonistic impact of alternate price variation and liberalised bilaterals to international carriers leading to excess capability out there are a number of the major reasons for the losses, according to the civil aviation ministry.
A revival strategy is now being labored out as the government targets to make the airline "competitive" prior to making a recent push for disinvestment.
On Tuesday, a senior finance ministry legitimate stated the government was taking a look at shifting Air India's non-core property and "unsustainable debt" to a special objective vehicle as a part of measures to restore the nationwide carrier.
The airline is staying afloat on a bailout package extended by the previous UPA regime in 2012.
In the current monetary year, the airline has won an fairness infusion of Rs 650 crore up to June. A Turnaround Plan (TAP) and a Financial Restructuring Plan (FRP) had been licensed for Air India in 2012.
Last month, the government sought Parliament's nod for Rs 980 crore as supplementary grants for fairness infusion into the airline.
Earlier this month, the ministry informed the Rajya Sabha that the government remains dedicated to the disinvestment of Air India however has no plan to exit the nationwide carrier altogether.
About the situation of home carriers, Prabhu stated that each time the fuel costs pass up, the airways get badly affected because this is a variable cost and can't be absorbed into trade model immediately.
"Now, we will have to work on it. Not only India but globally. Some of the global airlines are facing serious problems," he stated all through the interview.
Air India grappling with unsustainable debt: Suresh Prabhu
![Air India grappling with unsustainable debt: Suresh Prabhu]()
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August 22, 2018
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