Air India is being drained of a staggering Rs 6,000 crore every year on account of servicing its huge debt burden estimated at Rs 48,876.81 crore as on March 31, 2017, Minister of State for Civil Aviation Jayant Sinha informed the Rajya Sabha on Tuesday.
The minister said the airline is facing financial pressure and earning less profit due to the high debt burden as an offshoot of past accumulated losses.
The cabinet committee on economic affairs (CCEA) had on June 28 cleared the proposal to go ahead with the disinvestment of the airline which has plunged into losses after it was merged with Indian Airlines in 2007 by the UPA government.
Air India's market share has shrunk to 12.9 per cent from 35 per cent a decade ago.
Sinha said to implement the decision of the CCEA, appointment of transaction adviser, legal adviser and asset valuer shall be taken up as per terms and conditions and scope of work of advisers in accordance with the model request for proposals suggested by the Department of Investment and Public Asset Management.
Noting that liquidity constraints continue to impact the airline's smooth functioning, he said the company has been making constant efforts for substituting its high cost working capital loans with long term low cost debt. Air India has been in consultation with various banks so that the interest costs can come down substantially in the coming years to improve its profits, the minister added.
Air India made a net loss Rs 3,643 crore for the financial year ended March 31, 2017. Meanwhile, a section of Air India employees on Tuesday staged protest against the government's decision to privatise the national carrier, saying they were always ready for a turnaround of the airline.
However, Air India chief Ashwani Lohani assured employees their interests would be safeguarded as he sought to allay concerns over possible layoff following the government's decision to sell its stake in the national carrier.
"I would like to reassure all my employees that during the process of disinvestment, the government and the airline management would like to safeguard your genuine and valid interests and ensure that suitable measures to this effect are put in place," Lohani, said in a letter to the staff.