India Civil Aviation Minister Vayalar Ravi stated Air India would likely receive an additional equity infusion of INR12 billion (USD268 million) with a group of ministers (GoM) deciding to prepare a proposal on the issue soon (PTI/Economic Times/The Hindu Business Line/The Telegraph, 23-Jun-2011). “The GoM will bring a proposal to release Rs 1,200 crore of equity and place it before the Cabinet Committee on Economic Affairs within a short time-frame,” Mr Ravi said. The GoM also decided to establish a committee to examine the turnaround and financial restructuring plans of Air India and submit a report within six weeks for a review. This committee will also examine the plan to restructure the airline’s debt.
Air India likely to receive additional USD268m equity infusion
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Australia-India air travel market grows rapidly but SE Asian hubs hinder nonstop services
The Australia-India market has experienced rapid growth over the last three years, prompting Australia to lobby for more direct services. Visitor arrivals from India are up 50% since mid-2013, and total passenger traffic between the two countries is up approximately 30%.
Air India launched services to Melbourne and Sydney in 2013 but the Australia-India market is still dominated by Southeast Asian flag carriers. Singapore Airlines has been able to maintain a leading 41% share of the market. Malaysia Airlines also still carries more Australia-India passengers than Air India.
Attracting more nonstop flights from Air India, or the possible launch of nonstop flights to India by Australian carriers, will not be easy despite growing demand. Southeast Asia’s network airlines have a competitive advantage as they serve several gateways in both Australia and India. Southeast Asia’s growing medium/long haul LCCs have also started to compete in the Australia-India market and are well positioned to take a large share of the anticipated growth.