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Government to inject Rs800 crore in Air India

Government to inject Rs800 crore in Air India
AFP
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First Published: Thu, Feb 18 2010. 02 41 PM IST
Updated: Thu, Feb 18 2010. 02 41 PM IST
New Delhi: Government on Thursday approved a Rs800 crore injection for cash-strapped national carrier Air India as part of deal committing the airline to a major cost-cutting programme.
A civil aviation ministry statement said the Rs800 crore ($174 million) handout would be made in two phases.
The state-run airline declared a $1.19 billion net loss for the year to March 2009 on account of the global economic downturn and reduced passenger traffic.
The statement said the airline would reduce its fleet from 146 to 105 aircraft by March 2011 and try to save $425 million in costs for the current fiscal year.
Air India has recently tried to lower costs by cutting loss-making routes and rationalising wages.
The airline, which merged with state-run Indian Airlines in 2007, announced plans in September to cut performance-related pay by up to 50% for over 7,000 employees, including top management.
But the carrier was forced to delay implementation of the plan after senior pilots staged a five-day work stoppage in protest.
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First Published: Thu, Feb 18 2010. 02 41 PM IST
More Topics: India | Aviation | Air India | Equity | Bailout |