Govt panel recommends infusion of Rs30,000 crore into AI
22 Nov 2011
New Delhi: A panel of secretaries, set up to recommend a restructuring package for the financially hamstrung national carrier, Air India, will ask the government to extend Rs30,000 crore support in funds and consider disinvesting government stake once the carrier turns profitable. The recapitalisation plan is to be spread over 10 years.
The committee of secretaries opted to go with recapitalisation after considering seven other options.
The committee estimates that Air India will make cash profits by financial year 2018 on equity infusion of Rs30,231 crore.
The plan will bar the carrier from purchasing new aircraft, except Boeing 787s, and some on lease. The panel envisages that Air India would be made EBITDA positive by 2013 with upfront equity of Rs6,750 crore.
An Oversight Committee, with representatives from finance ministry, would be set up to monitor the carrier with a mandate to ensure that the struggling behemoth achieves operational efficiency.
The empowered committee will also monitor Air India's expenditure.
