Is there any possibility of recovering the debts of Air India?

alt Aug, 3 2023

The Storied Skies: A Look at Air India’s Debt Situation

Have you ever looked up at a plane streaking across the sky and wondered about the commercial airplane industry? Let's take a gander at the tale of the Maharajah of the skies - Air India. It has an illustrious past, and an uncertain future, so we're here to talk about a question that's on everyone's mind. Is there any possibility of recovering the debts of Air India? I'm not going to be your Captain, but I promise you, dear friend, this will be an interesting journey. Fasten your seat belts, and let's soar deep into the financial turbulence of Air India.

Understanding Air India's Turbulent Journey

So how did Air India end up low on fuel and flying straight into a storm of debts? Now, this is a story. Air India wasn't always the debt-laden carrier it's known as today. Once upon a time, it was actually quite the high-flyer - pun definitely intended. The stalwart of Indian civil aviation, Air India began its journey in 1932, and quickly gained a solid reputation for its excellent service, becoming one of the most prestigious airlines in Asia. But like most beautiful tales, this one had a villain too, and it was the monster we know as "Debt".

A Rising Debt mountain: How did it all go wrong?

A bunch of factors, including economic fluctuations, policy changes, and competition from private airlines mounted and began eating into Air India's profits slowly but surely. Now before we bemoan the plight of the Maharaja, let's not forget my favourite quote from the Harry Potter series, "Help will always be given at Hogwarts to those who ask for it". The Indian government didn't leave its flagship carrier high and dry. On the contrary, they pumped in massive funds to keep the airline afloat. Unfortunately, the various rescue packages didn't result in a profitable turnaround.

Air India's Current Debt position

To understand the possibility of recouping its debts, it's essential to have a grip on Air India's current debt position. As of 2020, the total debt is reported to be a whopping INR 60,074 Crore. That's like buying 15 million iPhone 12 Pros - quite a lot, isn't it? A closer look into the financials reveals that the income it generates is insufficient to fuel the interest and the operating costs, hence the debt keeps on ballooning.

Plan of Action: Turning the Tides

So, what can be done? How can Air India weather this storm? As any coach of a teetering sports team will tell you, the turnaround process begins with a solid strategy and making tough calls. Streamlining operations, cost-cutting, and boosting revenues are part of the generic playbook. Sounds doable, right? But little did you know, the Indian government has a trick up its sleeve, and it's called "privatization". Yes, you heard it right. They are planning to sell the airline and the potential buyer will not only get the Maharaja's crown but his debts as well. Now you might wonder, who would buy an airline in debt? Well, turns out there are some who see potential amidst uncertainty.

The Bright Side: Potential ways to Recover

The outlook seems bleak, but the silver lining is that there's always a possibility of recovery. For instance, Air India has assets that could be potentially profitable - like its prime landed property, artistic assets, and valuable international and domestic landing slots at airports. And who knows? Perhaps the buyer may just create a magical turnaround like the fairy tales we love.

The Final Verdict: Is Recovery Possible?

Coming back to our initial question, is there any possibility of recovering Air India's debts? I'm not a financial wizard, but I do believe in the power of possibility. Air India's story isn't over yet. It's a tough road ahead, no doubt, but with strategic planning, asset management, and maybe a little bit of luck, there's always a chance for recovery. Out of the turbulence could come tranquillity. For now, however, we can only wait and watch as this saga unfolds.

Now, when the next Air India flight passes over your house and your curious neighbour asks about the aeroplane's story, you have a tale to offer, and an exciting one at that.