Cash-strapped Air India is struggling to continue operations without any equity infusion from the Indian government so far this fiscal.
On December 9, Air India management sent an urgent SOS to the government, seeking immediate sovereign guarantee for raising Rs2,400 crore as fresh loan to keep the airline running until the outcome of the second divestment process is planned.
Ashwani Lohani, chief managing director of the divestment-bound airline, posted on Facebook: "Air India needs to survive till it is sold. I wonder why is it so difficult for this appreciation to sink in..."
Lohani's post added: "...in this environment of disinvestment, expecting a radical improvement bordering on a turnaround is an impractical thought. That output can be given sans inputs is a grossly impractical thought. Air Indians are indeed putting in their best even at this critical juncture and that is very very appreciable."
According to sources, Air India only has a chance to be sold if it is in operation until the change in ownership takes place.
Statistics reported by The Times of India say that Air India has a total debt burden of close to Rs74,000 crore - that includes nearly Rs60,000 crore of aircraft and working capital debt and Rs14,000 crore of net current liabilities or payables. A special purpose vehicle, AI Asset Holding Ltd, has taken on Rs29,464 crore of the airline's debt along with some assets.
"Of the remaining debt, we are finding it hard to do debt servicing of close to Rs225 crore per month. That is the shortfall between our expenses and income," the airline sources informed.
The expression of interest for Air India is yet to be issued.
The Indian government is sweetening the deal by attaching the least possible debt tag - limited to aircraft loans only that the new buyer will anyway take and no working capital debt - for the sale.
On its part, the government is walking a financial tightrope and has not been able to bring any equity to Air India this fiscal - apart from taking away Rs29,464 crore of the airline's debt and relieving it from servicing of that significant portion of the debt.