New Delhi: The civil aviation ministry has asked for a cabinet nod to infuse additional equity and a further loan for National Aviation Co. of India Ltd, that runs Air India, a ministry official said on Wednesday.

Money crunch: An Air India aircraft at the IGI airport in New Delhi. Harikrishna Katragadda / Mint

It is unclear what is the increased amount the ministry has now sought for Air India. The official, who spoke on condition of anonymity, declined to provide details.

He, however, said a decision in this regard is expected by January after consultations with the finance ministry. State-run Air India had been seeking additional funds to manage a financial crisis it faced because of steep jet fuel costs this year.

The ministry has also proposed to the cabinet to push back implementing a new ground handling policy by six months from the earlier proposed date of 1 January.

“We may have to give it some more time," the official said, citing airlines’ opposition and a delay in clearing Air India’s ground handling joint ventures by the cabinet as the principal reasons for the delay in implementing the policy meant to streamline the largely unorganized ground handling services at key airports. The policy is expected to come up for cabinet approval on Thursday.

The aviation ministry—currently considering increasing levies on passengers and airlines to support airport modernization at Mumbai, Delhi and Bangalore airports—also expects to have the much-delayed aviation regulator Airports Economic Regulatory Authority to monitor airport charges in place by early next fiscal year that begins 1 April, the official said.

The ministry is also hoping that a decision will be taken on jet fuel getting the status of declared goods, which would allow airlines to pay 4% sales tax across the country, significantly lower than the levies they now pay, which varies from state to state.

With only few more days of the current session of Parliament to go, it is unclear whether jet fuel will be granted this status in the face of stiff opposition from state governments.

“Some middle ground should be found (between the states and the central government). It may not be as low as 4%," the ministry official said a day after state governments made their opposition vocal.