Govt makes another bid to save AI from NPA tag

Source :Saurabh Sinha, TNN | Jan 31, 2012, 06.00AM IST


NEW DELHI: The government is making last-ditch efforts to save Air India (AI) from the non-performing asset (NPA) tag. With repayment not forthcoming, Air India has not been able to pay installments to several banks and the 90-day period will be over on Tuesday. 

A senior AI official said the airline would be able to pay the Rs 215 crore as interest to banks in time to avoid being termed an NPA. 


Aviation secretary Nasim Zaidi is meeting AI CMD Rohit Nandan - the two men trying to preventing AI from shutting down - on Tuesday morning to review the situation. "AI would not default on interest payment to banks this time and, if need be, seek two-three days to make the payment to avoid the NPA tag," the official said. 

When pilots of the erstwhile Indian Airlines went on strike about a fortnight ago to protest non-payment of five months' performance-linked incentive (PLI) and salary, the government had promised to release Rs 150 crore for the airline to enable it to pay two months' PLI to employees. Based on this written assurance, the no-pay, no-work agitation was called off within a day. 

"That money has not come so far. We somehow paid one months' PLI to employees from our internal resources. We are told the promised Rs 150 crore would be released on Tuesday. Out of that, we will pay one more months' PLI and top it up from other resources to pay interest to banks," said the official.

However both AI and ministry officials admit that unless the government infuses a substantial amount of equity into AI, the airline will not be able to chug along like this.