In a big boost to sinking national carrier Air India, the cabinet committee on economic affairs (CCEA) today approved its turnaround and restructuring plan, which includes a government bailout of Rs30,000 crore for the airline by 2020 and a restructuring of debt.
"The turnaround plan of Air India has been approved," civil aviation minister Ajit Singh told reporters after a meeting of the CCEA.
The carrier will hive off two units - transportation and maintenance repair overhaul, the minister said.
At least 7,000 Air India staff will be transferred to its maintenance, repair and overhaul (MRO) subsidiary; while another 12,000 are to be transferred to transportation services. The MRO unit will be able to service aircraft from other airlines as well.
Operational efficiency in terms of on-time performance too is to be increased to 85-90 per cent in two years, from the current 71 per cent.
Singh said restructuring Air India was necessary as the government could not continue to spend public money on it.