Fresh funds will be authorised capital and soft loans, not a bailout package: Air India's Raghu Menon
22 Aug 2008
New Delhi: Reeling under mounting losses accumulated over a period of time, the costs of an ongoing merger as well as an industry-wide downturn, flag carrier Air India will seek aid from the government to the tune of Rs2,000 crore. According to the head honcho of Air India-Indian Airlines (AI-IA), Raghu Menon, the money was going to be a mix of equity infusion and soft loans and not a bailout package.
''We want to bridge the gap between the paid-up capital of Rs145 crore and authorised capital of Rs1,500 crore along with some soft loans. However, this will not be a bailout package as it's being described,'' Menon, CMD of the merged AI-IA entity said.
''We have not finalised any number so far. But it could be more than Rs2,000 crore,'' Menon said.
AI lost nearly Rs2,144 crore last fiscal, a figure which could well double this year due to high oil prices. Airlines now deep in the red are looking at infusing funds to meet working capital requirements.
''Fares have gone up due to increase in jet fuel prices. We are cutting costs but the real thing will be fall in fuel prices,'' Menon said
