GoM to consider Air India's restructuring plan next month
14 June 2011
New Delhi: Badly struggling Air India may get another lifeline in a few weeks' time when a group of ministers (GoM) considers its restructuring plan, including its mountain of debt. On Monday, oil minister Jaipal Reddy instructed oil marketing companies, which are under his purview, to maintain uninterrupted fuel supply to AI for a period of three months.
Earlier, these companies had put AI on cash-and-carry basis as the carrier had been defaulting on payments for a long period of time. This forced the carrier to curtail flights and combine about 15% of its 320 daily flights over the past several weeks because of fuel shortage.
"The turnaround plan has been approved by the bankers.... Now it needs to go to a Group of Ministers (GoM) and it should happen very fast ... within the next couple of weeks," civil aviation minister, Vayalar Ravi said.
As for further equity infusion by the government in Air India Ravi said his ministry was holding "regular dialogue with the finance ministry. We will continue this dialogue and go to the GoM when necessary".
Government has already made a provision of Rs1,200 crore in the budget for infusing equity in Air India in this financial year. Till now, the government has injected Rs1,200 crore and Rs800 crore in two tranches in 2009-10, raising the national carrier's equity base to Rs2,145 crore.
Ravi said all issues, including routes from which Air India has withdrawn, were under discussion and would be taken up by the GoM.