Government prepares new revival plan for Air India

The government has prepared a new revival plan for Air India which involves transferring the airline’s working capital debt of about Rs 290 billion to a special purpose vehicle, Air India Assets Holding Limited. At present, Air India has a total debt of Rs 550 billion. Once the revival plan is implemented, the carrier will be left with a debt of about Rs 260 billion, mostly on account of aircraft loans. Also, the airline’s annual interest liabilities will decline by Rs 27 billion from Rs 44 billion to Rs 17 billion. Discussions have already started with banks as their consent is required to transfer debt. Meanwhile, the terms and interest rates on loans would remain the same as changing them would amount to debt restructuring.