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Government to inject USD266m into Air India

1-Mar-2011 11:03 AM

India's Government, according to its federal Budget, plans to inject INR12 billion (USD266 million) into Air India in the 12 months ended 31-Mar-2012 (IANS/Dow Jones/Hindu Business Line, 28-Feb-2011). Finance Minister Pranab Mukherjee, in his 2011?12 budget, said: "As a part of the process for financial restructuring of National Aviation Company of India Ltd, an amount of INR1200 crore has been provided." The infusion will increase the carrier's equity base and help shore up its finances. While agreeing to provide financial assistance, the government has requested the airline look at ways to reduce losses. The Ministry of Civil Aviation in Feb-2011 stated it would request budgetary support in the amount of INR20 billion (USD443 million) for the next fiscal year, meaning the budgetary allocation was lower than what was demanded and expected. The government injected INR8 billion (USD177 million) into the carrier last fiscal year and INR12 billion (USD266 million) this year. The airline has total debt of around INR400 billion (USD8.9 biillion) including INR220 billion (USD4.9 billion) of long-term loans taken mainly to finance aircraft purchases.