'Air India to seek Rs 2500 cr from government'

Chicago: Air India will soon approach the government for funds worth Rs 2500 crore ($500 million) to finance its integration with Indian Airlines and other expansion plans, a top official has said.
"We have a very small equity base of Rs 145 crore but our aircraft acquisition plan alone is worth Rs 45,000 crore " said Raghu Menon, chairman and managing director of Air India.
"So we need the funds to beef up our equity base and to integrate the passenger services system of Air India and Indian Airlines," Menon told IANS. "We will go to the civil aviation ministry very soon with a proposal."
Air India had ordered 68 Boeing aircraft in 2006, while Indian Airlines had ordered 43 Airbus planes. Last year, the government created a new holding arm, National Aviation Company of India Ltd, to merge the two carriers.
According to the chief executive, here for a meeting among the chief executives of Star Alliance, a pact among 21 global and three regional carriers which Air India will join soon, the funds will be sought in a mix of debt and equity.
While Rs 1,500 crore will be sought as equity, the remaining Rs 1,000 crore will be requested in the form of debt, he said, adding that the earlier proposal for an public offer had been shot down for the moment.
The Air India chief also said that the complete integration of the two carriers was expected to conclude by end-2009.
"We hope to sign a contract with EDS Aviation by the end of this month for the passenger services system," Menon said, referring to the US-based company that has provided technical and software solutions to several carriers.
"So by the end of calendar 2009 or latest by the first quarter of 2010, you can expect Air India and Indian Airlines to both operate under one code - and that is AI," he said. At present, Indian Airlines operates under the IC code, while Air India has AI.
12/12/08 IANS/Sify

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Categories: NACIL Dec 2008