Govt depending on RBI for Air India survival

New Delhi: The government today hoped that Air India will see better days ahead with the Reserve Bank of India approving a financial restructuring plan for cash-strapped national carrier.

“I think things would move in a positive direction,” Civil Aviation Minister Vayalar Ravi said replying to a question on RBI clearing the proposal.[caption id=“attachment_140431” align=“alignleft” width=“380” caption=“Union Minister of Civil Aviation & Overseas Indian Affairs, Vayalar Ravi. Image courtesy PIB”]  [/caption]

On Thursday, the RBI cleared the debt restructuring plan for the loss making carrier under which the bank approved extension of the loan tenures to 15 years from 10 years.

The decision, which would considerably ease the debt servicing burden of the troubled airline, was taken at a meeting that was attended by officials of the RBI, Air India and SBI Caps which has submitted the debt restructuring proposal.

More from Business

Hyundai India’s Rs 27,870 crore IPO oversubscribed by 2.28X, largely driven by institutional investors How Indian fintech startups are driving Malaysia’s UPI-like digital payments revolution

“Our officers have discussed the issue with them (RBI officials) and explained the situation. They (RBI) made some suggestions,” Ravi said refusing to elaborate further.

Under the Rs 18,000 crore corporate debt restructuring (CDR) proposal, the lenders would extend the tenure of Rs 11,000 crore short-term loans into long term loans of 15 years and convert Rs 7,000 crore debt into equity.

The national carrier has accumulated debt of over Rs 64,000 crore from 14 lenders which, under the aegis of SBI Caps, had submitted a restructuring proposal to RBI seeking its permission to extend the loan tenures, among other issues.

Impact Shorts

More Shorts

Tata Harrier EV vs Mahindra XEV 9e: Design and road presence compared

As Trump weaponises tariff, Fed sees a bigger worry: Not jobs, but rising prices in America

Out of this, over Rs 22,000 crore are accumulated losses while Rs 40,000 crore amounted to the loans taken for aircraft acquisition.

Ravi said a meeting of the group of ministers (GoM) appointed to examine issues related to Air India will be held at the earliest.

Asked whether government will allow beleaguered Kingfisher Airlines to import jet fuel, Ravi refused to give a direct reply, saying it was a policy matter.

“A policy decision will have to made,” he said.

Queried about the threat of a section of pilots of the erstwhile Indian Airlines to launch yet another agitation on 30 November, he said the pilots should wait for Dharmadhikari committee to file its report as the panel was looking into their grievances.

“I hope wisdom will prevail upon them. Everybody has to cooperate to run Air India,” Ravi said, adding that the airline lost Rs 200 crore during the agitation by the pilots in May.

“A member of the Dharmadhikari committee is not well. The committee will submit its report and make some suggestions into the grievances of the pilots and we will look into them,” he said.

The Indian Commercial Pilots Association (ICPA), which represents a section of the pilots of the erstwhile Indian Airlines, has threatened to launch yet another agitation on 30 November if the government fails to honour its commitments made in May.

PTI