Govt settles over Rs 61,000 cr Air India debt and other liabilities before transfer to Tata Group

New Delhi: The government has settled over Rs 61,000 crore of Air India's legacy debt and other liabilities that were left in AIAHL — the company holding residual assets and liabilities of the airline — ahead of the transfer of the national carrier to the Tata Group, a top official said on Thursday.

The airline had a total debt of Rs 61,562 crore as of August 31, 2021. Of this, the Tata Group took over Rs 15,300 crore and the rest 75 per cent or around Rs 46,000 crore was transferred to a special purpose vehicle, AI Asset Holding Ltd (AIAHL). AIAHL also held Air India's non-core assets such as stake in Hotel Corp of India (HCIL), paintings and artifacts and immovable properties.

Tuhin Kanta Pandey, Secretary, DIPAM -- which ran the Air India privatisation process -- said Parliament had last month given nod for spending of Rs 62,057 crore towards equity infusion in AIAHL for repayment of dues and liabilities of Air India. Of this, broadly about Rs 61,131 crore has been used to repay the entire debt and other liabilities such as fuel dues to oil companies, he said.

"The interest outgo on the debt and other liabilities was very high and it was decided to square off the debt now." As of August 31, 2021, the airline's total debt stood at Rs 61,562 crore, out of which around Rs 46,000 crore was transferred to AIAHL. The airline also had about Rs 15,000 crore excess liabilities towards unpaid fuel bills and other operational creditors.

So the debt and liabilities with the government was around Rs 61,000 crore.