Govt may provide Air India Rs2,500 cr to face crisis

Govt may provide Air India Rs2,500 cr to face crisis
PTI
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First Published: Wed, Oct 15 2008. 04 20 PM IST
Updated: Wed, Oct 15 2008. 04 20 PM IST
Hyderabad: The government may provide flag carrier Air India up to Rs2,500 crore in the absence of funds from the market route, to help it stay in the skies right through the global financial crisis.
“It is owned by the government and as like any owner of a company, government should be ready to infuse liquidity into it. Air India has a very small liquidity base of Rs 145 crore and with an estimated aircraft of Rs40,000 crore it is absolutely unacceptable.
“There is need to infuse further liquidity to make Air India a viable entity,” Civil Aviation Minister Praful Patel said.
The 77-year-old airline, which initiated a fleet renewal programme three years ago and merged with its sister airline Indian last year, has proposed infusion of Rs1,000-1,500 crore of equity capital.
It is also looking for soft loans to the tune of Rs1,000 crore from the government that can be repaid over a period of time.
The airline like its private sector competitors has been facing a drop in traffic, especially premium air travellers - a fallout of the global economic slowdown.
Asked about plans for the Air India IPO, Patel said there is no discussion on public listing and that there was “no point in talking about that at this juncture.”
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First Published: Wed, Oct 15 2008. 04 20 PM IST