Panel pill for AI turnaround

New Delhi: A committee of secretaries today asked the finance ministry to bail out Air India by infusing fresh capital and extending soft loans.
It has also asked the petroleum ministry to give the beleaguered airline, which has suffered more than Rs 7,200 crore in accumulated losses, at least three more months to pay up its jet fuel dues.
The committee, headed by the cabinet secretary, has indicated that Air India need not pay interest on past unpaid jet fuel bills during this period.
The airline has also been asked to restructure incentive pay-outs to employees to cut down on its wage bill, discontinue non-viable overseas routes, leverage real estate holdings and delay aircraft purchases to reduce costs.
The airline has also been asked to hire a cost audit firm to help it keep tabs on its costing.
These decisions were taken after the airline and its merchant banker SBI Caps made a presentation before the high-level committee headed by the cabinet secretary. The committee was set up to look into the financial mess the state-run carrier had landed itself in.
SBI Caps has chalked out a turnaround plan aimed at generating Rs 3,000 crore through internal accruals over the next six months. The plan also includes steps to mobilise additional revenue of Rs 1,800 crore by cutting costs and through savings.
25/07/09 The Telegraph

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Categories: NACIL Jul 2009