New Delhi, Apr 23: Air India is facing a cash crunch of Rs 200-250 crore on a monthly basis, which in turn is affecting the maintenance funds. The company is not able to buy all it needs, the civil aviation ministry said.
The ministry also informed Parliament’s Public Accounts Committee that shortage of cash was responsible for an inoperational aircraft.
“There is a cash deficit of Rs 200 crore to Rs 250 crore every month which affects availability of funds for procurement of spares,” The Times of India quoted the ministry as telling the PAC. It added that they were trying their best to provide maximum financial resources to buy spares for improving utilisation of ideal aircraft.
This PAC is examining AI’s functioning because of the government’s decision to disinvest 76% stake in the national carrier.
Earlier the aircraft engines were sent abroad for overhaul and repair, but now these functions are performed domestically. AI is also regularly talking to its suppliers to uplift credit hold so that a smooth supply of spares in maintained.
AI’s cash situation remains bad. It has a total debt of Rs 48,876 crore (government-guaranteed Rs 25,388 crore and non-GOI guaranteed Rs 23,488 crore).
With AI’S turnover increasing operations like time performance, aircraft utilisation and load factor have improved. However, cash losses remain high.
AI was also planning to offer a VRS (voluntary retirement scheme) to its employees. The plan was dropped as it was not financially feasible.