Just days after the grounding of Jet Airways (JAI, Mumbai International) due to massive debts, fellow Indian airline Air India (AI, Delhi International) said it lacked as much as INR90 billion rupees (USD1.3 billion) needed for the repayment of debt due in the current fiscal year.
The Economic Times has reported that the airline appealed to the government for another bailout which is its only way to find the required amount. However, a decision is not expected before a new government takes power after the ongoing elections.
"Either Air India defaults or prunes its operations and thus costs to repay these loans. Representations have been made to the finance ministry on the issue," a source said.
Air India's fiscal year starts in April and ends in March.
The airline's total debt stands at INR540 billion rupees (USD7.8 billion). The government recently offloaded more than half of this amount, INR290 billion rupees (USD4.2 billion), to a newly formed special purpose vehicle Air India Asset Holdings Ltd (AIAHL). The new company is now trying to sell non-core subsidiaries of the airline to repay the debt. The annual servicing of the debt now offloaded to AIAHL cost Air India INR27 billion rupees (USD390 million).
The current government of Narendra Modi said that it does not intend to inject any further financing directly into Air India.
Jet Airways has total debt of around INR85 billion rupees (USD1.2 billion).
