Finance ministry refuses to pay Rs 105cr to Air India

NEW DELHI: Debt-ridden Air India does not seem to be getting life-saving money in a hurry. The finance ministry has turned down aviation ministry's request to release Rs 105 crore to the Maharaja. The home and defence ministries owe this money to Air India for the VVIP flights operated by the airline. The finance ministry had earlier asked aviation authorities to work out a long-term cash requirement for AI based on some reliable plan to turn around the airline.

"AI had taken Rs 200 crore last month from a bank for 15 days to pay salaries. We had hoped payment of Rs 105 crore dues of VVIP flights would help us repay that loan. But that request has been turned down," said sources. Now a group of ministers on AI will meet next week to discuss how to keep the airline alive. With Tuesday's Cabinet reshuffle ending the uncertainty over Vayalar Ravi (who got additional charge of the ministry this January) continuing as aviation minister, AI employees are looking forward to firm steps from the veteran Congress leader.

"No amount of money pumped in the airline or plans made for AI can work without the right management in place. In the past also we have seen plans like merger and buying planes going horribly wrong and AI is now on death bed. The minister must do something about the serious mismanagement," said a union leader on condition of anonymity.

Thanks to questionable decisions like mega plane deals and AI-IA merger taken during UPA-1, AI is facing an uncertain future with the airline now not able to pay salaries or bank loans on time. A turnaround plan worked out for the airline has pegged AI's cash requirement at over Rs 44,000 crore over the next decade along with over 100 more planes for the airline to survive.

But given its gross mismanagement, whether the government does pump that kind of money remains to be seen. Long time employees including senior pilots feel a board of governance should be formed for AI so that no one individual is able to hold sway over the dying airline. "AI needs money but it also needs the right people at top to ensure that money does not go into a black hole," said a senior pilot who has seen the airline's change of fortunes in past few years.