Without A Buyer, Air India Might Shut Down In Six Months

Domestic and International carrier Air India might be forced to shut down by June next year if it fails to find a buyer as “piecemeal” arrangements cannot be sustained for long. Amid continuing uncertainty over the fate of the national carrier, an airline official said that there is also a need for funds to restart operations of 12 grounded narrow-body planes. 

The airline that has a debt burden of around INR 60,000 crore, the government is still working on the modalities for the disinvestment. The government has already left the debt-ridden airline and refused to inject funds any more amid it privatisation plans. With the airline somehow keeping itself afloat with peace meals arrangements, which frankly are unlikely to sustain long, the airline official added on that as per the statistics, the government has infused INR 30,520.21 crore that it was supposed to in the carrier from the financial year 2011-12 to December this year. 

With Air India almost needing about INR 1,100 crore to get new engines for the 12 grounded narrow-body planes, the carrier might as well go Jet Airways way if a prospective buyer does not come on board by June next year. 

Will Air India survive till June next year? or will this be the demise of yet another Indian carrier? 

Air India reportedly sought out an INR 2,400 crore in sovereign guarantee to mop up funds for meeting operational requirements, there are somehow managing the operations at present and at best sustain the situation till June. In 2018-19, Air India’s net loss is provisionally estimated to be about INR 8,556.35 crore. With the government likely to issue an Expression of Interest (Eol) for the stake sale in the fourth quarter of the fiscal, Airline officials say that it would take at least six months to complete the transaction in the eventually of an investor coming on board, provided the sale process kicks starts early next month.

At the same time, the official also did not sound very hopeful of the government getting an investor in such an economic situation, which has also affected the domestic aviation industry.


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