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According to the senior government official, Air India, which is currently in debt of Rs. 55,000 crores, will transfer debt worth Rs 29,000 crore to a special purpose vehicle. This will reduce the debt burden from the state-owned airliner and will also result in a reduction of interest outgo.
This move will also result in the decline of the national carrier’s annual interest outgo from Rs. 4,400 crores to Rs. 1,700 crores.
The senior Civil Aviation Ministry official said the debt of Rs 29,000 crore would be transferred to the special purpose vehicle, which has already been set up. In order to transfer the debt to the Air India Assets Holding Ltd, the approval of the lenders is highly sought after.
Also, as a part of a revival plan for Air India, a ministerial panel earlier this week approved a proposal for strategic sale of Air India’s ground handling subsidiary Air India Air Transport Services Ltd.
The move is expected to help in easing the financial burden on the airline. Meanwhile, the plan of cost cutting and revenue enhancement measures is also being implemented that would result in annual financial benefits worth Rs 2,000 crore.
