Air India spent over 85% of its Rs 6,000 crore equity infusion last year on clearing pending staff salaries, paying off aircraft loans and interest and its debt to oil companies and airport operators.
Of the Rs 6,000 crore received in 2012-13, the airline spent Rs 1,803 crore on pending staff salaries, paid off Rs 1,253 crore as jet fuel dues to oil marketing companies and Rs 1,100 crore as loan and interest payments for aircraft acquired, official data showed.
The airport operators were paid Rs 976 crore, service tax department Rs 510 crore and Rs 286 crore was spent on aircraft spares. Another Rs 72 crore was paid to IATA travel agents due to flight cancellations during the pilots’ strike and on other heads.
Regarding equity infusion in Air India, the government had committed to provide Rs 30,231 crore between 2011-12 and 2020-21 as per the Financial Restructuring Plan (FRP).
However, it has made a budgetary provision of only Rs 5,000 crore in 2012-13, whereas it should have infused an additional Rs 3,574 crore as the balance of unpaid amount since 2011-12, as laid out in the FRP.
The data showed that in 2011-12, government was to have infused equity of Rs 8,536 crore but actually released Rs 1,200 crore. In 2012-13, it was to release Rs 3,678 crore along with the balance of Rs 7,336 crore. But it released only Rs 6,000 crore, leaving a balance of Rs 5,014 crore.
The Parliamentary Standing Committee on Transport, Tourism and Culture has asked the government to provide Air India with the promised equity infusion which has been accumulated since 2011-12 “without any interruption” during the current financial year.
Without timely equity support, Air India’s Turnaround Plan would be “adversely affected”, it said, pointing out that a major condition under which the RBI and the consortium of banks supported the FRP was timely infusion of equity.
