GoM delays funding decision for Air India by a week
22 October 2009
New Delhi: The first meeting of the Group of Ministers (GoM) to discuss funding options for cash-strapped Air India discussed issues related to the carrier but put off taking any decisions as reports from consultants and an expert panel is awaited. It will meet again in a week.
''The GoM discussed issues related to Air India and the aviation industry, but no decision could be taken. Inputs are awaited from the turnaround panel and consultants and we will meet again in a week,'' said civil aviation minister Praful Patel.
According to government sources, the GoM may however decide to go with a recommendation of a committee of secretaries (CoS) to infuse Rs5,000 crore in Air India. Of this the government may infuse Rs2,000 crore in the form of equity and rest in funds. The loss-making airline is limping along on an equity capital of Rs145 crore.
Air India has booked losses of around Rs7,200 crore and has accumulated debt of Rs15,000 crore. Of this, reportedly, Rs11,000 crore is high-cost debt.
The GoM is headed by finance minister Pranab Mukherjee and includes Praful Patel, petroleum minister Murli Deora, home minister P Chidambaram and Planning Commission deputy chairman Montek Singh Ahluwalia.