Air India to get Rs 5,000 cr equity infusion in 3 years

New Delhi: Cash-strapped Air India may get a fresh lease of life with the government agreeing to infuse a performance-linked equity of Rs 5,000 crore over the next three years into the state-owned airline.
A committee of secretaries (CoS) headed by Cabinet secretary KM Chandrasekhar considered Air India’s proposal on Saturday to inject capital and provide soft loan, a person close to the development said.
“The government would support the airline in meeting its short- and medium-term capital requirements. The CoS has agreed to increase the equity base of the company and take it above Rs 5,000 crore over the next three years,” the official said. He also said the government would help the airline in getting loan from banks if required.
“The airline is comfortable with what the committee has proposed. The airline’s cost-cutting exercise so far undertaken was not satisfactory. They need to do a lot more,” another government official said on condition of anonymity. Hit by the worst financial crisis in its history, Air India had earlier sought over Rs 15,000 crore from the government to tide over the crisis. Air India had an accumulated loss of over Rs 7,200 crore as on March 2009.
30/08/09 Nirbhay Kumar/Economic Times

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Categories: NACIL Aug 2009