PMO approves Rs.1,200 crore equity infusion for Air India

New Delhi: The Prime Minister’s Office (PMO) has given the go-ahead for an equity infusion of Rs.1,200 crore in national flag carrier Air India, and the matter may soon come up for a final cabinet clearance, two government officials said.
The aviation ministry had sought the advice of cabinet secretary K.M. Chandrasekhar and the PMO, in keeping with new guidelines that require all big-ticket capital projects to be reviewed by the two offices before going for cabinet approval.
“There have been no adversarial comments” from the PMO, said one of the government officials, asking not to be named.
Air India’s losses have soared to $1 billion (Rs.4,510 crore) since its merger with Indian Airlines in 2007. The carrier lost Rs.2,226 crore in 2007-08, Rs.7,189 crore in 2008-09, and Rs.5,551 crore in 2009-10. Comparatively, losses in 2006-07 stood at just Rs.448 crore. In 2004-05, it made a profit of Rs.161.97 crore, while in 2005-06 profit stood at Rs.64.44 crore.
The airline’s borrowings have increased from Rs.6,550 crore in 2007 to Rs.19,000 crore now. Its total debt stands at Rs.40,000 crore.
23/12/10 Tarun Shukla/Live Mint

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Categories: Air India Dec 2010