New Delhi: The Government on Saturday asked the Finance and Petroleum Ministries to help Air India, which suffered losses of Rs 7,200 crore last year.
A meeting of senior officials chaired by cabinet secretary K M Chandrasekhar asked the Finance Ministry to examine the amount of assistance required and review Air India's plans every quarter. The Petroleum Ministry was asked to extend the credit limit on jet fuel for at least three more months.
Air India has a working capital borrowing of about Rs 17,000 crore primarily to pay off its debt on account of fleet acquisition. It has made a case before the Committee of Secretaries (CoS) for fresh equity infusion by the government and a soft loan of Rs 3,000 crore. The airline has placed orders for 111 new planes worth over Rs 50,000 crore against Rs 145 crore worth of paid-up capital.
After the meeting, Air India CMD Arvin Jadhav said the "government is with us" and would give full backing to the airline on its growth and cost-saving plans. The focus of these plans were on revenue generation, he said, adding, the airline would keep the committee updated on these plans at its meetings to be held every month from now onwards.
Sources say Air India's parent company, National Aviation Company of India Limited has been asked to appoint a cost auditor to monitor review and ensure cost reductions. A new independent director will be appointed for Air India in the coming weeks. Air he national carrier's estimated losses last year ranged to Rs 7,200 crore.
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