Indian Minister for Civil Aviation, Praful Patel, confirmed the release of USD173 million in fresh equity support to Air India (in two equal monthly instalments) is subject to achievement of milestones laid down by the Group of Ministers (GoM), which had previously accepted the company’s savings and cost reduction plan of USD413 million (INR19.1 billion) for FY2009/10 (AFP, 03-Mar-2010). This announcement comes as the Indian Government reportedly plans to release USD87 million (INR4 billion) to Air India shortly – the first half of its approved USD173 equity infusion (The Hindu Business Line, 03-Mar-2010). The carrier also reportedly received USD16.4 million (INR750 million) in equity support, to cover outstanding dues to the Airports Authority of India (AAI). Further cost reductions are expected in the areas of employee salaries and a decrease in fleet size by 30% to 105 aircraft by Mar-2011. Meanwhile, Mr Patel stated Air India plans to return 22 leased aircraft commencing in Mar-2010 and “extending over the next couple of months” (Press Trust of India, 03-Mar-2010).
Indian Government prepares first half of USD173 million equity infusion to Air India
4-Mar-2010 11:50 AM