New Delhi, July 14: Government is contemplating capital infusion by way of equity and soft loans for the cash-strapped Air India which has deferred the future aircraft delivery in the backdrop of mounting losses of Rs 7,200 crore.
“….An equity infusion and soft loan by the government as a measure of softening the adverse financial situation (of Air India) is contemplated,” Civil Aviation Minister Praful Patel told the Rajya Sabha.
Responding to a Calling Attention Motion on Air India, he said the airlines has adopted various measures to improve its financial position.
These included rescheduling/cancellation of future aircraft delivery, rationalisation of routes, manpower and incentives of employees, he said.
The airlines, which was forced to defer payment of June salary to majority of its staff, has piled up a loss of Rs 7,200 crore as on March 31,2009. For the fiscal 2008-09, it is estimated to have incurred a loss of about Rs 5,000 crore in a difficult global aviation market.
Air India has placed orders for a total of 111 aircraft from Boeing and Airbus for its fleet replacement and expansion programme.
Observing that the national carrier had adopted several measures to improve its financial bottomline, Patel said decision to reschedule or cancel future aircraft deliveries had also been taken.
It was planning to return its leased planes at the earliest, he said, adding that rationalisation of routes to cut losses on traditionally loss-making ones has been done.
Noting that Air India’s equity base was only Rs 145 crore, the Minister said “the government, in the past, has never assisted Air India unlike governments in other countries that have assisted their airlines in similar difficulty.”
–Agencies