Air India might be forced to shut down by June 2020 unless it finds a buyer as “piecemeal” arrangements cannot be sustained for long, a PTI report quoted a senior airline official on Monday. The official also said there’s a need for funds to restart operations of 12 grounded narrow-body planes. The airline has a debt burden of around ₹60,000 crores.
“We had sought (from the government) Rs 2,400 crore sovereign guarantee to mop up funds for meeting operational requirement. But the government has provided guarantee only for Rs 500 crore,” the official said, requesting anonymity. “We are somehow managing the operations at present and, at best, we can sustain this situation till June. If a buyer does not come by that time, we will have to shut shop.”
After more than 25 years of flying, full-service carrier Jet Airways shuttered operations in April due to cash crunch.
In 2018-19, Air India’s net loss is provisionally estimated to be ₹8,556.35 crores.
Besides, it has a total debt of ₹60,000 crores, half of which has already taken out of the books and parked in the special purpose vehicle, Air India Asset Holding Ltd.