Govt to release Rs 705 crore to cash-strapped AI soon: Sources

New Delhi, Aug 31 (PTI) After an ad hoc payment of Rs
500 crore to partly clear its dues to Air India, Government
would release another tranche of Rs 705 crore to the national
carrier very soon, official sources said Wednesday.
Government, which had made a provision of Rs 705 crore
in the Supplementary Demands passed by Parliament this Monsoon
session, would very soon release the amount to the cash-
strapped carrier, they said.
An amount of Rs 500 crore has already been paid on ad
hoc basis on account of VVIP travel and evacuation flights
carried out by the airline.
Air India estimates that about Rs 613 crore are owed to
it by various Ministries, government departments and agencies,
apart from the cost of maintenance of aircraft taken out of
the operational fleet for VVIP operations.
The national carrier was experiencing a severe financial
crisis owing to massive fixed costs like high expenditure on
insurance, interest on working capital, aircraft loan and
leasing of aircraft. Due to liquidity crisis, it has also not
been able to make timely payment of salaries to its employees.
An amount of Rs 373 crore has already been raised by the
government from some ministries and departments on account of
operating chartered VVIP flights, the sources said.
The airline, which is burdened by an accumulated loss of
Rs 20,320 crore, has outstanding loans and dues of Rs 67,520
crore -- of which Rs 21,200 is working capital loan, Rs 22,000
crore is the long-term loan on fleet acquisition and Rs 4,600
vendor dues, latest official figures showed.