Air India Holding On to Rs 2,500 Crore Bank Guarantee from the Government, Could Use it for Future Loans

The Government of India had handed over a Rs 2,500 crore bank guarantee to Air India, and the airline could use it for raising loans in future.

By October 11th, 2019 AT 2:46 PM
Highlights
  • The Bank Guarantee from GoI amounts to Rs 2,500 crore
  • Air India is currently stuck in a financially tough spot

The Government led national carrier, Air India is close to its sale to a private bidder. However, that doesn’t mean that things are smooth for the state led airline. To handle its operations until the time, sale happens, the airline is looking forward to raising loans based on theRs 2,500 crore bank guarantee which the Government has extended to the carrier, an ET report said.

air-india-employee-union-privatisation

No Current Plans to Raise Loans

As per a statement by an anonymous Air India official, the airline is currently not thinking of further loans from the government but it does hold the Rs 2,500 crore bank guarantee with it, so if needed, the airline will be able to raise loans in the coming time.

A panel led by Union Home Minister Amit Shah is yet to decide on the further steps for the national carrier’s divestment process. Since the airline is in line for the sale in a few months’ time, all the promotions, appointments and fleet expansion operations have been put on hold for Air India. However, with this being said, Air India has expanded operations into new routes internationally owing to its retrieval of aircrafts which were grounded.

Air India Divestment Process

To recall, the government had also tried divestment in Air India before, but that time, the centre did not want to sell a full stake which scared away potential buyers for the airline’s stake. But, this time around, the government is ready to sell its entire stake in the airline.

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Whenever Arpit boards a plane he is filled with awe and bewilderment and soaring above the skies is something marvellous for him. An aviation and tech geek through and through Arpit writes at AviationScoop not only because he's experienced and good at his craft but also because flying is something which makes his heart flutter with joy.

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