New Delhi: A panel of ministers will meet next week to discuss infusing equity in loss-making state carrier Air India, civil aviation minister Vayalar Ravi said on Monday.
The panel has “on principle” approved recommending infusing Rs1,200 crore as equity capital in the ailing airline, but a decision will be taken at the next meeting after a note to the cabinet is prepared, a source familiar with the discussions told reporters.
The panel also “on principle” approved providing Air India with an additional Rs532 crore to settle past dues from the government, the source said, adding about Rs300 crore of that will be used to pay salaries to employees.
The past dues include cost of tickets used by government officials and evacuation charges of citizens from disturbed regions like Libya and Japan.
Air India is in talks with banks to restructure $4 billion of working capital debt and is in the midst of implementing a turnaround plan which would focus on a hub-and-spoke route model, cut costs by redeploying staff and unload non-core real estate.
The airline has not posted a profit since merging with former duopoly partner Indian Airlines in 2007 and relies on handouts from the government to survive. It is behind on its payroll obligations and was forced one day in May to cancel a handful of flights because it had not paid its fuel bills.