Pay us Rs 1,222 cr as VIPs flew free of cost, AI tells govt

Cash strapped Air India has approached the government to recover Rs 1,222 crore dues towards operating VVIP and special flights over the last five years, and the state-owned airline may get Rs 800 crore.

In the last five years, the ailing airline operated 47 VVIP flights for which the Boeing 747-400s were withdrawn from commercial services for a total of 313 days, sources said today.

Though Air India has billed an amount of Rs 1,222 crore for exclusive use of five Boeing 747-400 planes for VVIP operations and evacuation flights, the government could give the airline Rs 802 crore for the operation of three aircraft, the sources said.

The Government response is understood to have come up for discussion at a meeting here of a Committee of Secretaries (CoS) headed by Cabinet Secretary AK Seth against the backdrop of the decision to infuse Rs 1,200 crore as equity in Air India. The fresh equity is expected soon.

The airline has estimated that of the total pending amount of Rs 1,222 crore, the cost of maintaining these five planes was put at Rs 866 crore, the capital expenditure including for standby aircraft was Rs 206 crore and a cash cost of Rs 150 crore. Air India was earlier paid Rs 250 crore.

These four-engined planes were preferred for VVIP operations for security reasons.

The national air carrier is planning to dispose off these fuel-guzzling aircraft as these would not be viable for commercial operations, the sources said.

As the market price for these aircraft at present hovered around $15-20 million per piece as against $30 million due to a glut of similar planes in the market, the airline is waiting for the right time to sell them off, they said.

The CoS is also understood to have asked the national carrier to finalise its Turnaround and Financial Restructuring Plans and present it to the Civil Aviation Ministry in the next couple of days, so that the Group of Ministers (GoM) led by Finance Minister Pranab Mukherjee can take it up next week.