Another one....OMG hold your breath.....!!!
TIMES OF INDIA
Govt: Cash-strapped AI must prune order for new planes
21 Jun 2009
Saurabh Sinha, TNN
NEW DELHI: The government is likely to tell the cash-strapped Air India to prune its order for 111 planes that would cost the exchequer about Rs
44,000 crore. This order was placed three years ago when the aviation industry in India was growing at nearly 30% and the economy booming. But, now, in this slowdown, almost all airlines are struggling to remain afloat and AI is seeking a bailout from the government to survive. Nearly 45 of the ordered planes have already joined the Maharaja's fleet.
A highly placed government official said: "The airline has so far not come up with any concrete or credible plan that shows they have a road map to survive, leave alone emerge stronger. There is talk of AI seeking Rs 10-15,000 crore in support, clearing which is out of question. Being the national carrier we will hold its hand and support it." The Maharaja is going to seek soft loans and equity infusion from the government as it is finding it hard to even meet its working capital like paying salaries.
The demand made by the national carrier to the government comes in the wake of its orders for 111 new planes worth over Rs 45,000 crore against a puny paid-up capital of Rs 145 crore and authorised capital of Rs 1,500 crore.
Top official added that given the airline's poor financial health and the fact that aviation industry is unlikely to see any drastic improvement in fortunes in a hurry, AI will be asked to take a relook at its fleet acquisition plan. "AI should realistically assess if its needs all the 111 ordered planes. It needs to see if some planes can be cancelled or at least deliveries pushed back," the official said. As per the original schedule, the new fleet delivery was to be completed by 2011.
The government is worried how AI would mobilize Rs 44,000 crore for these planes. It has given a sovereign guarantee to the aircraft manufacturers, which means that if the airline can't pay for any reasons, the exchequer will have to bear the burden.