The Government of India told the Parliament on Tuesday that its chief advisory body Niti Aayog has termed the prospect of providing further monetary aid to the national airline carrier, Air India, as “unviable”.
The debt-ridden airline already owes a sum of Rs. 51,980 crore. The government on its part is working on liquidating the national carrier in a planned manner in order to restore it to a healthy operational and financial condition.
A strategy approved by the previous UPA Government included giving the airline a relief monetary amount of Rs. 30,231 for a decade, starting 2012.
The Civil Aviation Minister Mr. Jayant Sinha stated in the Rajya Sabha that continuing to give support to a company, which is just one of many in a highly competitive sector, would not be financially wise and the money that the government is investing there could be put to better use.
As per provisional figures, the total liabilities against the national carrier stood at a whopping Rs.51,980 crore of which Rs. 18,364 crore was for aircraft and Rs. 33,526 crore was for operational expenses.
In the last fiscal year (FY17), Air India had reported a net loss of Rs 3,643 crore, even though the operating profit increased to Rs 215 crore, according to the provisional figures.
An amount of Rs 26,000 crore has been provided to the deadlocked airline under the UPA-sanctioned relief package but it has done little in context of what the “turnaround” it was meant to make possible.
The Cabinet Committee on Economic Affairs gave the go ahead on the idea of strategically liquidating the airline in June of last year.
A group of ministers is currently working on the details of the same liquidation plan, which also involves taking care of the company’s unsustainable debt, demerger and disinvestment of its profitable subordinate companies.