Air India gets Rs 1,000 crore from National Small Savings Fund: report

Cash-strapped Air India, which was asking the government for more funds, has reportedly received an equity infusion of Rs 1,000 crore from the National Small Savings Fund (NSSF). The state-run airline will now avail of its unused sovereign guarantee to raise another Rs 500 crore as a loan next week, the Times of India reported.

"We got this equity infusion recently. The government had given us sovereign guarantee to raise Rs 3,500 crore as loan. We have raised Rs 3,000 crore so far and will avail the remaining amount by next week. The financial position is now slightly better after the equity infusion," an official told the daily.

The beleaguered Maharajah, reeling under a debt burden of over Rs 48,000 crore, is scrambling for cash infusions ever since the failed disinvestment attempt earlier this year.

Air India, which survives on Rs 4,600-crore annual bailout package, serves a mere 12.4 per cent of the domestic passenger traffic, and competes with aggressive private sector peers like IndiGo, SpiceJet and Jet Airways who are constantly baying for passengers.

With international crude oil prices hitting new highs, Air India's losses are expected to shoot up. In August, the Ministry of Finance had rejected Air India's demand for Rs 30,000 crore fund infusion plan and instead suggested ways to reduce its debt burden by selling non-core assets.

The airline is staying afloat on over Rs 30,000 crore bailout package extended by the previous UPA regime in 2012 for 10 years. Of the total bailout package, the airline has received Rs 27,195 crore so far. In June, the government had called off the proposed sale of a 76 per cent stake in Air India after no one showed interest in picking up the stake in the loss-making airline.