Since the beginning of the year, the government has infused cash to the tune of Rs 1,630 crore in Air India, as opposed to the budgetary estimate of Rs 650 crore
The Finance Ministry is still discussing a request for a bailout for the national carrier, but has ruled out the option of waving off Air India’s working capital debt of Rs 30,000 crore at one go, The Economic Times reported.
"They have other considerations and the money will not come in one go but would come in installments. Air India needs to get rid of its debt trap and a one-time support by the government would have helped Air India," a senior aviation ministry official told the paper.
He added that the other options on the table include a combination of equity and debt. An infusion of cash into the national carrier is essential for it to meet financial commitments. The airline's debt burden had warded off potential bidders when the government put it up for sale earlier this year.
The government wants the airline to be in shape for sale after the 2019 Lok Sabha elections after it failed to find buyers for a 76 percent stake in the airline, the report said.
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The Aviation Ministry had sought the waiver of Air India's Rs 30,000-crore debt, and also the infusion of cash to the tune of Rs 10,000-11,000 crore after its divestment plan was called off.
If the government agrees, this will be Air India's second bailout in five years. In 2013, the UPA government had approved an equity infusion of Rs 30,231 crore until FY21. The airline has already received about Rs 27,000 crore, the report said.
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Since the beginning of the year, the government has provided Air India Rs 1,630 crore to tide over the cash shortage. This includes a supplementary provision of Rs 980 crore which was released in August. The amount is in excess of the budgetary estimate of Rs 650 crore.
The airline had sought Rs 2,000 crore from the Centre, of which it has already raised Rs 1,500 crore and can raise an additional Rs 500 crore.
The airline used the money raised from the government to clear outstanding dues to lenders, both foreign and domestic, as well as vendors. However, it still owes Rs 5,000 crore to oil companies, and Rs 3,000 crore to the Airports Authority of India (AAI).