Turbulence ahead for AI: Govt plans an equity injection of Rs 980 cr while the airline wanted Rs 2.121 cr

NEW DELHI: The financial problems of Air India will worsen in the coming days. While the airline had asked Rs 2,121 infusion of the government's own funds after the divestment bid failed, the latter on Tuesday asked the parliament's approval to give Rs 980 crore in the fiscal year in course. The government "has requested funds for the injection of equity into Air India as part of its recovery plan," said Tuesday a statement filed in Lok Sabha. This is part of the total additional expenditure of Rs 11,697.9 crore, for which approval has been requested from Parliament.

"Given the return of savings available in the revenue section of the grant, the expense (Rs 980 crore) will not result in additional cash outflows", said the document filed in Lok Sabha. AI has so far received Rs 27,195.2 crore as an equity infusion under the Recovery Plan (TAP) and Financial Restructuring Plan (FRP) approved by UPA-II in 2012. In the current exercise, AI has equity infusion of Rs 650 crore until June.

Airlines asked Rs 2,121 crore as early as the first week of August to be able to cope with expenses like paying wages on time. "The airline must pay annual interest on its loan in September, which exceeds Rs 500. There is no way that the loan can be serviced without brewing equity," said a airline source.

After the failed divestment bid, the government gave a new sovereign guarantee for a loan of 1,000 rupees to AI, which had been revoked by the banks earlier. Unless the injection of funds is done quickly, AI will not be able to make payments to banks, aircraft leasing companies, oil companies and operators. airports that will then go to the government for their money. The airline has already started receiving notices from some tenants and banks.

After the failure of the divestment offer, AI has embarked on a major economic campaign. In mid-June, it was decided that cabin crew members would share hotel rooms to reduce costs. Air hostesses and flight marshals will be placed in three- and four-star hotels as far as possible instead of five stars. The airline hopes to save Rs 10 crore annually with these movements. The sharing of twins, which must be done in a gender-sensitive manner (which means that women are not invited to share rooms with men), will start with the crew members who have joined the airline. Last year. AI has about 3,000 cabin crew members.

He decided that no extra hours will be paid in non-operational areas, except in the case of "exceptional staff". In order to ensure optimal use, AI has ordered that all "crew members flying less than the guaranteed minimum hours must be enrolled to ensure that they are flying up to 70 hours a month. Any refusal to perform the flight after registration should be recorded and advised to take action in accordance with the agreement.

The airline will encourage its employees to use the subway to reduce the "huge amount (of expenses) incurred as reimbursements for transportation to staff / officers." There is an immediate need to monitor and control transportation costs Avoidable and Staff Leaders should be encouraged to use Metro services wherever they are available, "says the order of cost reduction.