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The national carrier, Air India’s Joint Forum of Air India unions, associations, guilds, federations, and trusts, has written a letter to the Prime Minister seeking a financial package worth Rs 50000 crores for Air India.
“Air India has always performed national duties irrespective of the serious risks involved. It has been established beyond doubt that Air India is a necessity for the country especially in times of crisis,” the union body wrote to the prime minister in its letter on May 27. The letter was reviewed by BusinessLine.
Over the last month, Finance Minister Nirmala Sitharaman has announced a Rs 20 lakh crore package to boost the Indian economy. While there was a specific mention for the civil aviation industry, there was no financial package or relief given to boost the airline industry.
“We request you to kindly grant Air India a financial package of Rs.50,000 crores which will go a long way in ensuring that Air India emerges as the strongest and best Airline of India,” it said in its letter.
Aviation sector snapshot
The COVID-19 pandemic has shaken up the civil aviation industry. Crisil’s estimates indicate that the Indian aviation industry will “crash-land this fiscal”, witnessing a revenue loss worth Rs 24,000-25,000 crore. ICRA has said that the Indian aviation industry will witness revenue de-growth of 44 per cent in FY2021. Overall, the industry will witness 41-46 per cent de-growth in domestic passenger traffic and 67-72 per cent de-growth in international passenger traffic for the Indian carriers in FY2021.
Air India and mounting debt
The government is in the midst of privatizing Air India due to mounting debt. Though it has has been reduced to Rs 23,286 crore from Rs 60,074 crore and the government has clarified that the net working capital is zero, which means the Maharaja’s current assets are equal to its current liabilities.
Due to the pandemic, the last date to submit an Expression of Interest (EoI) was moved from April 30 to June 30.
Air India is itself debt-laden. Despite this, it has played a crucial role by bringing back stranded Indians across the globe including several offline stations at a time when airlines all over the world had ceased operations due to the pandemic. In fact, even at peak of the COVID-19 pandemic, Air India operated flights to and from Wuhan in China which is the origin and center point of the coronavirus.
The airline has operated cargo and charter flights all through this period facilitating the movement of medicines and medical equipment between India and many other countries including China. Air India has also been operating flights for the government’s evacuation plan Vande Bharat mission, it said in its letter.
The letter has not received any response so far from the authorities.
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