Air India can’t move engine over Rs 100 crore GST dues

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The last mile is always the hardest and the situation is no different for Air India as it awaits outcome of the government’s second move to sell it off. The airline, which is yet to pay December salary, has almost completely run out of funds and is now struggling to keep flying in the absence of equity infusion this fiscal. Sample this: One of AI’s Airbus has been grounded in Vadodara for almost a week as its requires engine replacement. The Maharaja has a spare engine for this single aisle aircraft in Delhi but is unable to send it as it can’t raise the e-way bill because of GST dues. “Our GST dues are about Rs 100 crore and because of that the paperwork required to send the engine to Vadodara is not being done,” said a senior official.

The airline hopes to pay the GST dues on Thursday, along with salary to employees. “We have raised the cash to pay for these things from our ticket sales. Hopefully we will be able to send the engine to Vadodara once some GST dues are paid Thursday and then we raise the e-way bill required for that shipment,” said the official. Amid a life-threatening fund crunch, AI and the government are trying to restore faith among flyers to book tickets. Last November, aviation minister H S Puri said in Parliament that AI “would have to be closed down if not privatised.” After that, the airline saw a sharp dip in advance bookings. “On a year-on-year basis, we have witnessed 10-15% drop in advance bookings,” said a person in the know.

In the past few days, the government has been trying to assure passengers that AI will keep flying till it is sold off. “MoCA (ministry of civil aviation) reiterates that the government, while going ahead with the disinvestment, would ensure that AI continues to operate uninterruptedly and improves its operations also. There is no cause for worry to any of its stakeholders,” the ministry tweeted on Tuesday to allay concerns of both travellers and the airline’s unpaid employees. Before this, AI chairman Ashwani Lohani who has informed the government about the airline’s frail financial health had tweeted on January 4: “Rumours regarding AI shutting down or closing operations are all baseless. AI would continue to fly and also expand and there should be no cause for concern whatsoever to travellers, corporates or agents. AI, the national carrier, is still the biggest airline of India.” After these assurances, the dip in bookings has ebbed.

Despite its financials, AI which somehow raised funds to make nearly all its wide body Boeing 777 and 787s fly has aggressively expanded its foreign operations in recent months. “AI has launched/announced 12 international flights since April 1, 2019, and this is indeed a tremendous achievement as well as a magnificent contribution towards international travel from/to India. This also shows the tremendous inner strength of the airline,” Lohani tweeted on Wednesday. The grounded plane in Vadodara is lucky. AI has so far not been able to raise funds to make its 12 grounded Airbus A320 family planes take to the skies again. “These aircraft require engines and we already have significant dues to engine manufacturers. That is why we have not been able to get new replacement engines for our 12 single aisles,” said an official.

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