Measures for Credible Revival of Air India

Air India has been passing through a difficult phase for the last few years. Soon after the merger of Indian Airlines and Air India, the global economy went through a severe recession, and ATF prices hit an all time high. A highly competitive aviation market made an early recovery all the more difficult. These factors have resulted in losses in the last few years.
Air India is the national carrier, and Government of India has taken several steps to tide over the crisis. Government has inducted Rs.2000 crore in the equity and another Rs.1200 crore is being infused this year in an effort to correct the adverse debt-equity ratio.
Justice Dharmadhikari Committee has been constituted by the Ministry of Civil Aviation to address long pending human resource issues of the airline in a time bound manner.
New Strategic Business units are being set up to hive off MRO (Maintenance, Repair and Overhaul) and Ground Handling businesses within Air India. This would help Air India focus on tapping the considerable business potential of these markets.
Recently, Air India has suggested a Turn Around Plan (TAP), duly vetted by an independent agency, and a Financial Restructuring Plan (FRP) has been prepared by SBI Caps. Both are currently under the active consideration of the Group of Ministers.
All these short term and medium term measures are expected to make Air India a robust and competitive airline. The Government of India attaches utmost importance to the credible revival of Air India.
01/07/11 Press Information Bureau

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Categories: Air India Jul 2011