Weeks ahead of divestment, Air India faces multiple threats of being grounded

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Weeks ahead of divestment, Air India faces multiple threats of being grounded
  • Indian Oil threatened to stop supply of aviation turbine fuel to the airline, over unpaid dues.
  • Air India’s pilots also threatened the government with mass resignations if they go on with the divestment plan.
  • The debt of Air India has ballooned to a massive ₹60,000 crore and is struggling to carry on operations.


The troubles of debt-laden Air India do not seem to come to an end. Even as the government is planning to go ahead with its divestment, today yet another state-owned company Indian Oil threatened to stop supply of aviation turbine fuel to the airline, over unpaid dues.

BPCL and HPCL too said that they will cut off fuel supplies unless their bills, running into few thousands of crores, is cleared.

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This comes two days after the pilots union was enraged with the government’s plan to sell 100% of the national carrier. The pilots threatened a mass resignation if they plan to go ahead with it. Already as many as 120 pilots resigned in protest.

In the Budget 2019, the finance minister Nirmala Sitaraman said that they plan to speed up the process of divestment, and is ready to make structural reforms. She also said that they plan to expedite it by October this year, but there has been no major movement.

In the meanwhile, the debt of Air India has ballooned to a massive ₹60,000 crore, joining the ranks of state-owned telecom operators BSNL and MTNL who are struggling to carry on operations. This divestment could have brought in a new investor who could have help cut its debt, while providing the government with much-needed revenue as well.

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As government moves slowly in its planned sell-off, there is little interest from investors as well. In spite of rumours that Tata Group might bid for the airline, the group spokesperson insists that it is speculation.

Yet another airline Jet Airways which was grounded in April this year, failed to find a bidder and its case is now with the bankruptcy court. This was in spite of billionaire Hinduja brothers showing interest in it.



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