The government may have decided not to pull the plug on the ailing Maharaja, the way it’s dilly-dallying over making finances available to Air India shows the government’s priority.
The government may have decided not to pull the plug on the ailing Maharaja, the way it’s dilly-dallying over making finances available to Air India (AI) shows the government’s priority. The cash-strapped airline has asked the prime minister’s office (PMO) to release money or it will stop operations.
On the evening of July 8, AI wrote to the PMO to pay up dues of Rs1,220 crore for operating VVIP flights. “For the last one week, we were engaged in a dialogue with the PMO to get funds as things have reached a dire state. It is difficult to carry on daily operations,” said an official from the operations department.
The airline has a fleet of five Boeing 747-400 aircraft to be flown for VVIP operations. “We are expecting a payment of Rs805 crore from the government,” he said.
AI seems to have taken on more than it can handle. Its daily expenditure is Rs57 crore, while its daily earnings are just Rs36 crore.
“We are paying Rs12.5 crore daily to fuel companies as they have stopped our credit and put us on cash-and-carry mode,” he said.
On May 27, oil companies refused to fuel AI’s aircraft, asking them to clear the pending dues first. As a result, 12 of the airline’s flights got cancelled. “We have managed to partially pay the salaries for the month of May to our employees and but we have no money to pay salaries for June,” he said.
“Besides fuel bills, there are other vendors we have to pay like the caterers, newspaper and magazine vendors. Even the banks are not giving us loans as they are waiting for the government to clear the turnaround plan submitted by the board of directors to the government in March. It’s a catch-22 situation. If the money is not pumped in, we have no option but to shut down operations,” he said.
The spokesperson for AI confirmed the development, but declined to comment further.
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}