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NEW DELHI: The beleaguered flag carrier Air India has asked for Rs 10,000 crore from the government in terms of equity. In a meeting of committee of secretaries (CoS) headed by cabinet secretary, the airline is also believed to have sought similar amount as soft loan, a government official familiar with the development said.
An Air India spokesperson said that he will not comment on the development and would not go beyond what had been mentioned in the official statement.
Air India and SBI Caps made a presentation to the CoS and gave a turnaround plan for the company. The airline was told by the high-level committee to cut cost and improve revenue for getting any assistance from the government.
"The airline would have to assure that its future sustainability is not built on cards. Instead of a long term plan for saving and revenue management the company will have to give quarterly report. They need to get a concrete plan," a senior official said on the condition of anonymity. He, however, added that the current equity base of the company is very low and it needs to be expanded.
A civil aviation ministry statement said that Air India was told to come up with a concrete cost reduction proposal including replacement of the current productivity linked incentive (PLI) with an alternative scheme within the framework of the department of public enterprises (DPE) guidelines.
The CoS is expected to meet again by the end of August to review the financial restructuring being undertaken by the airline.
The high-level panel has asked the aviation company to appoint a cost auditor to monitor, review and ensure that the cost reduction and operational efficiencies are effected. In a major relief to the cash-strapped Air India, the CoS recommended a three-months credit limit by oil companies to the airline.
Air India has an accumulated loss of Rs 7,200 crore as on March 2009. The company is currently finding it difficult to meet the operational cost.
ET
NEW DELHI: The beleaguered flag carrier Air India has asked for Rs 10,000 crore from the government in terms of equity. In a meeting of committee of secretaries (CoS) headed by cabinet secretary, the airline is also believed to have sought similar amount as soft loan, a government official familiar with the development said.
An Air India spokesperson said that he will not comment on the development and would not go beyond what had been mentioned in the official statement.
Air India and SBI Caps made a presentation to the CoS and gave a turnaround plan for the company. The airline was told by the high-level committee to cut cost and improve revenue for getting any assistance from the government.
"The airline would have to assure that its future sustainability is not built on cards. Instead of a long term plan for saving and revenue management the company will have to give quarterly report. They need to get a concrete plan," a senior official said on the condition of anonymity. He, however, added that the current equity base of the company is very low and it needs to be expanded.
A civil aviation ministry statement said that Air India was told to come up with a concrete cost reduction proposal including replacement of the current productivity linked incentive (PLI) with an alternative scheme within the framework of the department of public enterprises (DPE) guidelines.
The CoS is expected to meet again by the end of August to review the financial restructuring being undertaken by the airline.
The high-level panel has asked the aviation company to appoint a cost auditor to monitor, review and ensure that the cost reduction and operational efficiencies are effected. In a major relief to the cash-strapped Air India, the CoS recommended a three-months credit limit by oil companies to the airline.
Air India has an accumulated loss of Rs 7,200 crore as on March 2009. The company is currently finding it difficult to meet the operational cost.
ET
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