Air India recently announced its plans to have a turnaround from its negative position to a positive position within 4 years. This announcement is strongly being backed by the supporters of Air India who have indicated that they will help Air India in repaying its 40,000 crore debt.
Air India has plans to increase revenues by 5000 crores and lessen costs by 4000 crores per annum which will bring it to a profitable position within 4 years. Out of the 40,000 crore loan, 18,000 is towards working capital and 22,000 is towards new aircrafts bought.
The loans were taken with a high interest rates. However, SBI along with Deloitte have prepared a corporate debt restructuring plan for Air India. And once this plan is presented to RBI, RBI might consider reducing the interest rates for Air India thereby reducing the pressure considerably.
Air India has accumulated losses of over Rs. 15,000 crore. The carrier lost Rs. 2,226 crore in 2007-08, Rs. 7,189 crore in 2008-09, and Rs. 5,551 crore in 2009-10.
Get Daily Marketing Updates in your Inbox
About Hitesh Bhasin
