National carrier Air India Ltd. asked the central government to revive. Air India is seeking Rs 2100 crore from the central government to address all the operational activities and expenses.
These funds only help Air India to address their operational activities. The funds will help them in the short term. Again for expansion which includes procurement of aircraft on lease, Air India have to dip into the market again to raise money.
Statement of Air India officials
The sum of RS 2100 helps to address immediate working capital and another operational requirement. In actual Air India needs a more significant amount in the longer term to lease planes and expand the operation. Air India needs a right amount of capital to compete with other domestic and international airlines.
According to the current reports Air India has pending aircraft orders of Indian Airlines exceeds 1000. The third largest airline service in the world is Air India. The US is having the world most significant airline service followed by China.
Apart from this Air India could notice the drop in the amount of share in the domestic market the share of Air India is about to go down by 10%. The expectations the share price has not increased due to the competitors unusually low fare carriers.
Statement of CAPA
CAPA said that the national carrier has plans to induct only nine aircraft on lease. The focus of Air India is now shifted to replacement rather than expansion. As a result, Air India will notice continue loss in the domestic market. The main reason behind the loss of Air India is the aggressive approach to another airline carrier like Indigo, Spice Jet and many other national and international airlines.
Statement of Aviation Ministry official
“The government is expected to infuse equity into Air India to fund its operational and working capital requirement.” said by Aviation Ministry.
Government aviation ministery stated that the government is providing the necessary financial funds to Air India. The decision for infusion of funds is not in the hands of Air India. Government and the civil aviation decided the amount and time of immersion.
Air India has also delayed the salary of its officials during the last few months. Air India has also filed the tender to raise 1000 crore from banks to meet its working capital requirement.