Air India now faces a risk of being declared a non-performing asset by financial institutions/banks and a big question mark on its survival as per agencies report.

The debt-laden airline is on the verge of defaulting on payment of installments on working capital loans of about Rs 22,000 crore for the third month in a row, following which lenders may take this step. Since April, AI has been defaulting on payment of interest on working capital loans as well as service tax.

The airline's total debt is over Rs 43,000 crore and it owes an additional Rs 4,500 crore to vendors like oil companies, airports apart from unpaid wages to employees. The situation is so bad that the aviation ministry is having a rethink on what to do with the 27 Boeing 787 Dreamliners ordered by AI as part of the 111 aircraft order, whose delivery is to begin from October. By the end of this fiscal, AI's combined debt-losses-due figure is expected to reach Rs 1-lakh crore mark. The government is trying to restructure AI's loans but there has been no progress so far.

The board of the embattled flag carrier Air India today met and reportedly decided to submit a revised turn-around plan to the government. Though airline spokesperson described the meeting as "routine", a source said, "The board decided to submit a revised turn-around plan to the government following the finance minister's recent call to cut down on expenses.