Air India Ltd. (AIND) won approval from lenders to restructure 180 billion rupees ($3.5 billion) of debt in the latest rescue plan for the state-owned carrier, the Business Standard reported.
Nineteen banks, led by State Bank of India, approved extending the maturity on 105 billion rupees of debt for as long as 15 years, with the remaining 75 billion rupees to be repaid through a government-guaranteed bond issue, the newspaper said. The plan will require cabinet approval, it said.
Air India was awarded 40 billion rupees in a government bailout last month as it struggles with fuel and loan costs. The unprofitable airline, the nation’s third-largest, has also helped prolong a price war that has contributed to losses at listed Kingfisher Airlines Ltd. (KAIR) and Jet Airways (India) Ltd.
Calls made out of office hours to the phone of K. Swaminathan, a spokesman at Air India, weren’t answered and he didn’t immediately respond to an e-mail seeking comment.
Air India has been unprofitable since its 2007 merger with state-owned domestic carrier Indian Airlines Ltd. The Mumbai- based company piled up losses of about 181 billion rupees in the three years ended March 31, 2011, then-Aviation Minister Vayalar Ravi told parliament on Nov. 24.
The airline has failed to turn surging demand into profit as it struggles to combine operations following the merger. It has 263 employees per aircraft compared to 102 at IndiGo, the only profitable carrier in India.
To contact the reporter on this story: Andrew Macaskill in New Delhi at firstname.lastname@example.org
To contact the editor responsible for this story: Paul Tighe at email@example.com