Air India has failed to meet its interest liabilities to its lenders for the third month in a row. The national carrier's unpaid interest liability to lenders has now grown to around Rs 700 crore for the April-June period, a source in the airline said.
The airline has to make the payments before July-end or its unpaid dues will slip into non-performing assets (NPAs) category of the 22 banks it owes money to, including the State Bank of India and ICICI Bank. However, another source indicated that the Government will not let the banks classify Air India as an NPA.
“We have not paid the interest liability but we have asked the Finance Ministry to release the dues the Government owes to us so that we can make the payments. We are keen to make the payments and make sure that the interest liability does not slip into NPA status. We hope the matter will be resolved soon,” said a senior official of Air India.
The airline is waiting for the Government to release Rs 1,732 crore. Of this, Rs 1,200 crore is additional equity infusion and Rs 532 crore is what the Government owes Air India for VVIP travel. The amount has received an in-principle approval from the Group of Ministers. However, a final decision is expected to be made on August 17.
Board Meeting
Air India also held its board meeting on Wednesday. “It was a routine board meeting. Many issues were discussed in the run-up to the Group of Ministers meeting on August 17,” said an Air India spokesperson, adding that the airline is in a “grave” financial situation.
The Group of Ministers looking into the revival of Air India is also likely to take up the turnaround plan of the airline which has already been reviewed by a Committee of Secretaries.