Ailing national carrier
Air India, which got a temporary reprieve from oil companies that threatened to stop the supply of jet fuel, has called for immediate release of the third tranche of Rs 1,200 crore to be used to part-pay its fuel dues of over Rs 2,400 crore.
Finance minister Pranab Mukherjee had announced the Rs 1,200-crore support to the national carrier in the Budget 2011-12.
Although it is unlikely that the carrier will get the third tranche early, Air India chairman and managing director (CMD) Arvind Jadhav, who took part in the a meeting of a committee of secretaries (CoS) chaired by Cabinet secretary K. M. Chandrasekhar and top officials from the ministries of petroleum and aviation among others, is understood to have put across this demand.
Jadhav is understood to have communicated to the higher-ups in the government to partly pay the oil dues besides seeking discount on payments to the oil marketing companies.
Air India's credit facility was withdrawn in December last year. It is currently paying for its fuel on cashand-carry basis. The airline has been given a one-month extension by oil companies - the deadline was March 29 - to pay the fuel dues.
While Air India has been paying over Rs 13.5 crore a day for jet fuel, oil companies have been seeking a hike of Rs 5 crore per day due to the rising crude prices.
Jadhav also gave a detailed presentation on the financial position of the airline.
The airline has received Rs 800 crore and Rs 1,200 crore respectively in 2009-10 and 2010-11 as additional equity infusion. Besides this the government has proposed a total expenditure of Rs 2,393.88 crore, both plan and non-plan for the civil aviation ministry in the Budget.
The airline is expected to post losses of over Rs 7,000 crore during the current fiscal. Despite desperate cost-cutting measures adopted by the airline during 2010, the average passenger load on Air India's domestic flights was only 22.2 per cent and international flights 67.9 per cent.
But evidently, this has not been enough for the carrier, which has run up a debt of over Rs 40,000 crore. It is eyeing for as much as Rs 17,500 crore more equity from the government to tide over its financial woes.
Courtesy: Mail Today 
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