The proposal in the budget, which has earmarked less than 60% of the amount sought by Air India, will impact cash flows and debt repayments at the carrier, a senior executive said. Industry experts welcomed the move, though, saying it's about time the government stopped cash handouts to the airline.
"Air India had asked for Rs 4,277 crore as plan outlay for 2015-16 and has been given only Rs 2,500 crore. For the current fiscal year (2014-15), the government put in Rs 720 crore less than what was earlier decided. We thought that would be adjusted in the allocation for 2015-16, but what has happened is quite a different story," said the executive, requesting not to be named. The airline needs Rs 2,400 crore for loan repayment alone this year, he said, adding, "Of course, there will be some savings from lower jet fuel prices, etc., but I am not sure that will be enough."
02/03/15 Anirban Chowdhury/Economic Times