Government has allocated 62,057 crore in a special purpose vehicle (SPV), Air India Asset Holding Limited (AIAHL), in addition, to bear most of Air India’s debt 1,944 crore to cover all losses incurred during the pandemic to clear the national carrier’s liabilities before handing over Air India to the Tata group, showed budget documents released on Tuesday.
As per Revised Estimates of Budget for FY 2012, AIAHL has received equity investment of 62,057 crore, including 36,254 crore for repayment of government-guaranteed borrowings for Air India Limited, 12,357 crore for repayment of loans for sale and leaseback rentals for aircraft; And 13,446 crore for repayment of other dues and liabilities. Air India had a grant-in-aid for cash losses during the pandemic 1,944 crores.
The Tata Group, with its subsidiary Tales Pvt. Ltd, had submitted the winning bid of 18,000 crore against the reserve price of 12,906 crores. Bid included payment of 2,700 crore while maintaining a debt of Rs. 15,300 crores.
The disinvestment of the national carrier was concluded on January 27, with the Center completing the handing over of Air India, and its subsidiaries, Air India Express and AISATS (50% stake), to the Tata group.
As on 31 August 2021, the total debt of Air India was 61,562 crore. The airline’s total debt at the recently ended December quarter is not yet available in the public domain.
Union Budget 2022-23 also allocated 600 crore towards strengthening Regional Connectivity Scheme (RCS). “The proposal is for revival of 20 airports and starting 90 RCS routes, funding the viability gap for North East connectivity. A new scheme has also been formulated to provide aviation infrastructure to improve connectivity in the North-East region,” stated the Notes on Demands for Grants, 2022-2023.
Budget allocated for FY23 10,667 crore for the Ministry of Civil Aviation, above 3,224 crore in FY22. The total allocation in the Revised Estimates for FY 2012, however, was 72,652 crore, mainly on account of expenses incurred for the sale of Air India.
Finance Minister Nirmala Sitharaman also said that e-passports using embedded chip and futuristic technology will be launched in 2022-23 to enhance the convenience of citizens while traveling abroad.
Ronojoy Dutta, CEO, IndiGo said, “We welcome the new incentives for issuance of e-passports and introduction of digital currency. However, we are expecting tax concessions to the aviation industry in the form of reduction and allocation of ATF excise duty. Concessional finance to airlines to help us come out of the pandemic.”
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