The government has approved the infusion of Rs. 1200 crore as additional equity in cash-strapped Air India with a condition that its management rationalise the wage structure of over 25,000 employees.
“The infusion of enhanced equity fund would give much needed impetus to the Air India for its revival plan,” an official statement said.
The government had released R800 crore in February 2010 as equity induction in the National Aviation Company of India Limited (NACIL), now Air India Limited, for its revival plan.
“This will not only help restructuring the airline, but will also shore up its finances,” civil aviation minister Praful Patel said.
The Air India Board , which met in Mumbai few days ago, reviewed the financial performance which showed improvement in revenue, yields and overall passenger load factors since its turnaround plan came into operation.