Proposal for Air India equity infusion to reach Cabinet next week
Indian Minister for Civil Aviation, Praful Patel, announced plans to submit a proposal to the Indian Cabinet for a USD174 million (INR8 billion) equity infusion to Air India, based on the carrier’s cost reduction programme, following a meeting between the Group of Ministers (GoM) to discuss the carrier's turnaround on 03-Feb-2010 (The Economic Times, 03-Feb-2010). The GoM is scheduled to meet again in the next few days for further clarification of the carrier’s issues. The GoM initially requested Air India reduce its costs by USD435 million (INR20 billion) by the end of FY2009/10. However, Mr Patel reports that the carrier has cut costs by just INR7-8 billion so far (The Hindu Business Line, 03-Feb-2010). Mr Patel added Air India may be eligible to receive a further USD261 million (INR12 billion) equity infusion in FY2010/11.
Indian Ministry of Civil Aviation: “We will move the proposal to the cabinet for the INR8 billion (USD174 million) capital infusion in Air India by next week. The GoM has asked for some clarifications. We will meet again. There has been massive cost cutting by Air India. There were number of issues discussed,” Praful Patel, Minister for Civil Aviation. Source: The Economic Times, 03-Feb-2010.