Mumbai: Tata Group-managed Air India has secured funds worth Rs 14,000 crore from the two public sector banks, State Bank of India and Bank of Baroda, which are a mix of fresh loans and refinancing of existing debt.
A report in Mint said the latest round of fundraising comprised Rs 12,500 crore to refinance loans and Rs 1,500 crore obtained through the pandemic-era Emergency Credit Line Guarantee Scheme (ECLGS).
The airline recently revealed its extensive plans of expansion into both domestic and international markets with leased aircraft and new planes. The report said that the current ingestion of funds will support the airline’s efforts in this regard.
According to Air India’s consolidated financial statements for FY22, the airline declared a total debt of Rs 15,317 crore in FY22, down from Rs 45,037 crore in FY21.
Under the expansion plan, the airline plans to induct aircraft on lease starting December last year and has placed a firm order for 470 aircraft with Boeing and Airbus.
The airline has plans to include 21 Airbus A320neos, four Airbus A321neos and five Boeing B777-200LRs. The airline also declared that it will be buying 470 aircraft, and 31 of those planes —25 brand-new Boeing B737-800s and six Airbus A350-900s, which are expected to come in the second half of 2023.
The Mint report added that the latest funds ingestion will be used to fund the payout for the voluntary retirement scheme (VRA), which is likely to cost over Rs 200 crore.
The new round of the voluntary retirement scheme has been offered to all permanent general cadre officers who are at least 40 years and have completed at least five years of continuous service at Air India.
Earlier in the day, Reuters reported that Air India is shifting to algorithm-based software long used by rivals to help it squeeze out more revenue from each flight. Air India is reportedly testing ChatGPT, OpenAI’s popular chatbot, to replace paper-based practices.
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