Lok Sabha Question No. 378 (UNSTARRED), answered on 2018-07-19
Subject: Financial Assistance to Air India
Ministry: CIVIL AVIATION
Asked by: VINAYAK BHAURAO RAUT, CHANDRA PRAKASH JOSHI, P. KUMAR, M. UDHAYAKUMAR, SAUGATA ROY, SHRIKANT EKNATH SHINDE, NARANBHAI KACHHADIA, RAMDAS CHANDRABHANJI TADAS, DHARMENDRA YADAV, Shrirang Appa Barne, ANANDRAO  ADSUL, SHIVAJI ADHALRAO PATIL

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GOVERNMENT OF INDIA MINISTRY OF CIVIL AVIATION LOK SABHA UNSTARRED QUESTION NO. 378 ` (To be answered on the July 2018) 19th

## FINANCIAL ASSISTANCE TO AIR INDIA

| 378.   | SHRI VINAYAK BHAURAO RAUT SHRI CHANDRA PRAKASH JOSHI SHRI P KUMAR ADV. M UDHA YAKUMAR PROF SAUGATA ROY DR. SHRIKANT EKNATH SHINDE SHRI NARANBHAI KACHHADIYA   |
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Will the Minister of CIVIL AVIATION

- three years and the current year, year-wise; .
- (b) the amount of 'outstanding loan on Air India at present and the taken to clear the same; steps
- (c) whether the Government has identified the reasons for Air India not profit and the efforts made by the Government to deal with the earning same;
- and the profits earned on account of flights operated by Air India; years being
- (whether the Government has sanctioned/released financial assistance to India and if the details thereof for the last three save Air years; SO,
- (9 whether the Government has any proposal to sell off some Air India in this regard, if s0, the details thereof; and properties
- g) the details of challenges faced by Air India and the plan prepared by the Union Government to bailout debt laden airline and the current status of disinvestment plan for Air India? being

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be pleased to state:-

## ANSWER

## Minister of State in the Ministry of CIVIL AVIATION

(Shri Jayant Sinha)

- (a): The details of the net losses and revenue earned by Air India during the last three years as per the audited accounts are given below: (Rs in crores)

Particulars

2014-15 2015-16 2016-17

Total

Revenue

20613.16

20526.12

22177.68

Net Profitl

(Loss)

(5859.91)

(3836.78)

(5765.16)

after tax

The revenue and profit/loss statements for the current year for Air India Limited are under audit.

- (b): The total outstanding loan on Air India as on 31st March 2017, aS per the audited accounts of FY 2016-17, is Rs 48447.37 crore; the details of which are given below:

- 4) Aircraft Loans

Rs 17,359.61 crore

- b) Working Capital Loans

Rs 31,087.76 crore

Total

Rs 48,447.37 crore

Air India Limited has always examined all options in order to improve its operational and financial performance: Air India Limited is exploring all the possibilities to restructure its debt in order to reduce its interest costs. Such WY %f negotiating lower rates of interest; conversion Of foreign currency debt by INR Loans to override the exchange rate impact etc  The debt burden is the main source of worry for the smooth implementation of the Turn Around Plan (TAP) of Air India  In this regard banks have also been requested to look into the possibility of restructuring the debt of the company: This would substantially down the interest costs and will help the airline in its revival bring

- (c): The main reasons for Air India Limited for facing losses in the past few years are given below:
- high interest burden;
- (ii) increase in competition especially from low cost carriers;
- (iii) high airport user charges,
- (iv) adverse impact of exchange rate variation due to weakening of the Indian Rupee, and
- (v) high cost of operation:

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In order to help Air India in mitigating its continuing losses, the Government formulated and approved the Turn Around Plan (TAP) and Financial .

- (d): The details %f the audited income; expenditure and profitlloss of Air India Limited during the last three financiai years are given below:

26466.18 24361.33 25797.40

(Rs in crores)

Particulars

2014-15

2015-16

Total

Revenue

20613.16 20526.12 22177.68

Total*

Expenditure

Net Profit

K(Loss)

(5859.91) (3836.78) (5765.16)

Total expenditure does not include extraordinary and exceptional items " `

after tax

- (e): Under the Turnaround Plan (TAP) approved for Air India Limited, the Government has released an equity infusion 0f Rs. 27195.21 crores till date  The details of equity infused in Air India Limited in the last three years are given below:

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Year

Equity Infused(Rs in Crores)

2015-16

3300

2016-17

2465.21

2017-18

1800

- (D: Air India has initiated the monetizsation of its assets: In the Ist phase; sale 0f30 properties have been taken by e-auction through MSTC, & PSU. Out of the these Air India properties; a total of 20 units have been sold through e-auction   Further, Chennai and also two Air India Flats in Hong kong NBCC have purchased vacant land at Coimbatore and SBI have purchased 06 Air India flats in Sterling Apartments at Mumbai: The revenue generated; including rentals for space at different locations, till date is Rs. 724 crore.
- (g): The challenges faced by Air India are as under:
- (0) high cost of debt;
- (ii) increase in competition,
- (iii) rising fuel costs;

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(iv) high operational costs:

In view of this precarious financial condition of Air India Limited and to take ATL back on the of profitability\_\_the Government has already approved and implemented a Turnaround Plan (TAP) for Air India Limited in 20i2 in terms of which all Government Guaranteed Aircraft Loans and interest thereon are Financial Restructuring Plan (FRP) has also been implemented by means of which high cost working capital loans have been converted into term debt carrying lesser rates of interest so as to reduce the financial burden on ATL: path being paid long

The TAPIFRP includes budgetary support amounting to Rs 30231 crores spread over 10 years i.e. upto FY 2020-21 and also equity support for the payment of infusion of Rs 27195.21 crores till FY 2018.

Air India has shown : considerable improvement both in terms of operational and financial parameters in the recent past; EBITDA has become positive since 2012-13 and continues to be positive even as compared to the negative EBITDA before the implementation of TAP\_ today

The Preliminary Information Memorandum (PIM) for inviting Expression of Interest (EOI) for the strategic disinvestment of Air India including its No EoI/ bid was received till the last date 0f receipt of bids i.e 31.05.2018.

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