Explained | Clearing the mounting debt of Air India

How soon will Air India clear its dues? What does the airline, bought over by the Tatas, owe banks, oil companies and others?

On Friday (December 3), the Government sought Parliament’s approval for infusion of ₹62,057 crore into Air India Assets Holding Limited (IAHL) or the special purpose vehicle that hosts Air India’s residual debt, liabilities and some assets. Two months back, on October 8, the Department of Investment and Public Asset Management (DIPAM) secretary Tuhin Kanta Pandey announced at a press conference that the Tata Sons subsidiary, Talace Pvt. Ltd., had won the bid for the national carrier, Air India. He said that after the setting of a reserve price of ₹12,906 crore the Tata Sons subsidiary had emerged the winner, quoting a figure of ₹18,000 crore. The other shortlisted bidder, Ajay Singh of SpiceJet, had quoted ₹15,100 crore.

A senior Government official said Air India will pay back all its debt and dues owed to banks, oil companies, airports and aircraft lessors by the end of this financial year. Explaining the break-up of the equity infusion sought from Parliament, the official said: “₹61,562 crore is Air India’s debt as of August 31, 2021. In addition to this there are excess current liabilities of ₹15,834 crore, which gives us a figure of ₹77,396 crore. Out of this if we remove the debt amount of ₹15,300 crore to be taken on by the Tatas, we get an amount of ₹62,096 crore. This was an estimate at the time and has now been determined as ₹62,057 crore.”