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Financial situation of Air India untenable

By IndianMandarins- 18 Dec 2019
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After facebook post, Air India chairman Ashwani Lohani has warned of flight disruptions and possible invocation of government guarantee because of delays in fundraising and refinance of aircraft debt. The national career is facing a cash crunch due to lack of fund infusion and monthly shortfall of Rs 220 crore in operations.

The aviation major is seeking the government approval to raise Rs 2,000-crore loan and refinance $819-million aircraft debt that would help tide over the financial crisis. “The overall financial situation of the airline is grossly untenable and it may not be able to sustain physical operations in the absence of immediate government intervention and support,” Lohani writes to the civil aviation ministry.

Air India received an offer from a consortium of four banks to refinance the $819 million bridge loan taken for acquiring six Boeing 787 and one Boeing 777 aircraft. The government guarantee in respect to the bridge loan will expire on December 27 and the airline has sought government nod to refinance it before end of the month.

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