Air India is likely to find it difficult to bridge the deficit of about Rs 1,800 crore in the next fiscal, executives said, reacting to the government’s proposal in the budget to give the cash-strapped airline Rs 2,500 crore instead of theRs 4,277 crore it had sought.
“We were to get Rs 720 crore due from the last fiscal, which has also not been allocated. This is going to create a lot of pressure on us, as we will be left with no option but to raise money through debt and that is costly. We will need this money and will approach the government again,” said a senior AI executive, who did not want to be identified, reports Economic Times.
According to the executives, about Rs 3,400 crore of the Rs 4,277 crore was to be used for servicing interest on loans for aircraft purchase, interest payments of the non-convertible debenture issue and other fiscal, guaranteed loans. Raising money from banks will be difficult, the executive cited earlier said, adding, “Not just the banks are not eager to lend to the aviation sector, the cost of funding from banks is also very high. We were performing well and problem with funding will create issues for us.”