Corporate May 24, 2013
New Delhi: Air India spent over 85 percent of its Rs6,000 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 Rs6,000 crore received in 2012-13, the airline spent Rs1,803 crore on pending staff salaries, paid off Rs1,253 crore as jet fuel dues to oil marketing companies and Rs1,100 crore as loan and interest payments for aircraft acquired, official data showed.
The airport operators were paid Rs976 crore, service tax department Rs510 crore and Rs286 crore was spent on aircraft spares. Another Rs72 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 Rs30,231 crore between 2011-12 and 2020-21 as per the Financial Restructuring Plan (FRP).
However, it has made a budgetary provision of only Rs5,000 crore in 2013-13, whereas it should have infused an additional Rs3,574 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 Rs8,536 crore but actually released Rs1,200 crore. In 2012-13, it was to release Rs3,678 crore along with the balance of Rs7,336 crore. But it released only Rs6,000 crore, leaving a balance of Rs5,014 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.