Thursday, August 09, 2018

Govt working on turnaround plan for Air India, may allow airlines to raise external commercial borrowing

New Delhi: As the Civil Aviation Ministry plans Rs 11,000-crore bailout package for ailing Air India, Aviation Secretary RN Choubey on Thursday confirmed that the centre is working on a turnaround plan to make the debt-ridden airline competitive. Also, the centre is working on ways to let all airlines raise external commercial borrowing to meet the rising operational costs. The decision seems to have been taken in wake of private airlines facing loss due to high fuel cost and falling rupee value.

"We would like to make sure that Air India as a state-owned enterprise remains competitive and its market share does not go down, which may require capacity induction... We will also ensure that sufficient delegation (of power) is given to the board of directors to decide on operational matters," Choubey said, reported Mint.
On Tuesday, it was reported that the Civil Aviation Ministry has approached the Finance Ministry for another bailout package of Rs 11,000 crore, but the process is still at a preliminary stage. The bailout package for Air India would help clean up its balance sheet, thereby making it attractive for investors when the government decides to its strategic stake sale again.
09/08/18 Business Today