Govt. offers relief to Air India, spares Rs 29,000 crore of its debt

New Delhi: In a major relief to Air India, the Central Government on Thursday decided to transfer Rs 29,000 crore of the Rs 55,000 crore owed by the national carrier to a special purpose vehicle (SPV).
Confirming the development, RN Choubey, Secretary, Civil aviation ministry said, “We are providing a partial but significant relief to Air India.”

On November 27, the Centre has cleared the decks for the strategic sale of Air India’s ground handling subsidiary-Air India Air Transport Services Limited (AIATSL)-by deciding its 100 per cent disinvestment in ownership.

Ministry of Civil Aviation (MoCA) had decided to proceed with the strategic sale of AIATSL after a ministerial panel meeting on Tuesday.

The proceeds from the sale of AIATSL would be used to pay off the debt of AI. Earlier the ministerial panel in June this year had decided to cut down debt and raise resources by selling land assets and other subsidiaries.

Earlier, on Nov 20, the Minister of State for Civil Aviation, Jayant Sinha had said that the government’s disinvestment plan in Air India has been put aside for time being as it is working on the revival of the debt-ridden enterprise.