New Delhi: At a time when Air India is going through a tough phase, the airline on Monday said it will shut down operations if it does not find a suitable buyer. The airline in a statement said that if nothing goes well, then the last operations will be until June next year.
In the midst of the ongoing uncertainty over the future of the national carrier, the airline said there is also need for funds to restart the operations of 12 grounded narrow-body planes.
The development comes as the airline has a debt burden of around Rs 60,000 crore and the Central government is still working on the modalities for the disinvestment.
It is important to note that Jet Airways was forced to shut down its operation this year in April because of the acute shortage of funds to run the airlines. After more than 25 years of flying, Jet Airways came to a close due to a severe cash crunch. Air India might follow the Jet Airways ways if no suitable buyer is found within the deadline.
The situation in Air India aggravated after the Central government refused to grant funds amid its privatisation plans. As per updates from the Central government, it has granted funds to the tune of Rs 30,520.21 crore in the flag carrier from financial year 2011-12 till December this year.
“We had sought Rs 2,400 crore sovereign guarantee to mop up funds for meeting operational requirement. But the government has provided guarantee only for Rs 500 crore. We are somehow managing the operations at present and at best we can sustain this situation till June. If a buyer does not come by that time, we will have to shut shop,” an official from Air India told PTI.
Most important to note here that Air India’s net loss in 2018-19 is provisionally estimated to be Rs 8,556.35 crore. Apart from this, the airline has a total debt of Rs 60,000 crore.