For Air India, the situation might turn from bad to worse. In the recently-concluded disinvestment process, the government could not find a single buyer for the national carrier. It is now reviewing its strategic sale process in the light of changes in the aviation sector. According to reports, the government has asked the airline officials to submit a revival plan before seeking fresh funds.
AI has delayed salaries of its employees for over three months. It posted operational profits of Rs298.03 crore in 2016/17, but due to high interest cost, reported net losses of Rs5,765.16 crore. But as the market situation gets tougher - high fuel costs, forex fluctuations and rising competition - there are chances that it might report operational losses in the current financial year. That means it will need more cash in future. Its historical cash burn rate - based on the 2012-approved turnaround plan - is over Rs3,714 crore.
With impending general elections, another strategic sale attempt looks like distant reality, and even the murmurs of a possible listing seem far-fetched. Though the strategic sale was a tacit admission by the government that it does not have the wherewithal to run AI, things have unfortunately gone back to square one.