New Delhi (Sputnik): Expressing its inability to handle huge debt service liabilities, India’s national carrier Air India has said it needs equity support from the central government to maintain current operational levels.
The divestment-bound cash-strapped airline said it had accumulated debt and liabilities totalling over $8 billion and urgently requires emergency funding of over $34 million to stay afloat.
On Thursday 22 August, Air India said fuel supplies to its aircraft had been suspended in six Indian cities — Mohali in the north, Vishakapatnam and Kochi in the south, Pune in the west and Ranchi and Patna in the east.
In the absence of equity support, Air India cannot handle its huge debt service liabilities, the airline said in a statement, adding: “However, our financial performance this fiscal is very good and we are moving towards a healthy operating profit. The airline, despite its legacy issues, is performing very well.”
Last month, according to media reports, the national carrier managed to pay flying allowances to its pilots for June. These allowances comprise over 85 per cent of their total pay. Now July flying allowances are pending.
Pilots say the onus of running the airline properly and ensuring that its employees get paid on time is on the Central Government until it sells the company to a new owner.
Last year, the Central Government had failed to sell a 76 per cent stake in Air India due to a lack of interest from bidders. Bidders said they found some of the sale terms too stringent to accept.
The government has said it is working out modalities for a second attempt to sell the national carrier.