New Delhi: The government would take a call on the future of ailing Air India, which plans to raise its working capital by Rs1,000 crore in the near future.
“We will put the whole picture before the Cabinet,” civil aviation minister Praful Patel told reporters here when asked what decisions the government was contemplating on the cash-strapped airline.
The government had last week approved an equity infusion of Rs800 crore for the national carrier, following which the airline decided to raise its working capital from Rs17,000 crore to Rs18,000 crore.
A decision to this effect was taken at a Board meeting of the National Aviation Company of India Limited (Nacil), which runs the national carrier, on Saturday. The move would help the airline to raise resources from the market to fund its fleet acquisition as well as other operational costs.
Highly-placed sources had earlier said the government should prepare a clear roadmap for the future of the loss-making airline in the wake of its huge losses and heightened competition.
As part of its cost-cutting measures, Nacil has been taking a series of measures, including launching negotiations with several state-run banks to avail loans of about Rs1,500 -2,000 crore on its working capital and convert its high-cost debt into low-cost.
The cash-strapped carrier already has over Rs16,000 crore working capital borrowings on its balance sheet, coupled with around Rs7,200 crore expected losses last fiscal. Its borrowings have risen steeply from Rs6,550 crore in November 2007 to Rs15,241 crore in June 2009.