Facing financial headwinds, Air India is in discussions with public sector banks to seek working capital loans to tide over cash paucity which also caused delay in December salary payments to a section of employees. Despite making an operational profit for the first time in a decade in 2015-16 at INR 105 crore, the airline has reported cumulative losses of more than INR 700 crore in the first six months of this fiscal.
“As long as we have debt and losses in our books, we are bound to have cash paucity. There is a cash crunch currently also and to tide over the problem, we are talking to the banks for some working capital loans,” highly placed sources told PTI.
However, they said the current cash requirement is just “marginal” and the situation is not so bad that it can hit operations. The airline spokesperson was not available for comments.
Significantly, Air India is expected to give a detailed presentation on its financial and operational performance to the Prime Minister’s Office (PMO) on Friday.
According to sources, Air India had to delay by a few days the payment of salaries for the month of December to a section of employees, apparently due to tight cash situation.
“This was after a long time when some of the employees were paid salaries on January 3, whereas generally all are given their payments on 30th or 31st of a particular month when salary is due,” another source at the airline said.
Air India, which is floating on a INR 30,000 crore bailout package from the central government, is saddled with INR 46,570 debt. This includes INR 15,900 crore worth aircraft-related loans.
The 10-year-long bailout package for the national carrier was approved by the previous UPA government in 2012. Of the total amount, so far more than INR 24,000 crore has already been infused into the carrier.
In the first two quarters of the ongoing fiscal, the airline has reported operating losses of INR 246 crore and INR 461 crore respectively.
Last month, the government informed Parliament that Air India’s operating loss stood at INR 246.14 crore in the first quarter of 2016-17 against the target of INR 87.28 crore operating profit for the same period.
(PTI)
