Crumbling under the weight of growing debt, state airlines Air India has received a loan worth of £150 million from Bank of India to meet urgent working capital needs, less than a month after floating a tender in this regard. This is the second time in the past months that the flagship carrier has received loans from a public sector lender. A source said the loan was given after tender was issued by the carrier on October 18, in which government guarantee-backed short-term loans totalling up to £150 million to meet “urgent working capital requirements”.
AI had previously borrowed £325 million as short tenure loans from two lenders- IndusInd Bank and Punjab National Bank. The loan was for meeting urgent working capital needs and the tender was floated in September. As part of efforts to revive the ailing carrier which holds a debt burden of over £5 billion, the government is preparing contours of its strategic disinvestment. The airlines is currently surviving on taxpayers' money under the bailout package extended by the previous UPA government in 2012.
As part of a turnaround plan, Air India is to receive up to £3.02 billion from the government over a ten-year period subject to meeting certain performance thresholds. The Air India group flies to 44 overseas and 75 domestic destinations. There are flights to Copenhagen, Tokyo, Washington, Stockholm, Sydney, Hong Kong, Kabul, Colombo, Seoul, Singapore and London, among other foreign cities.
