The government has asked state-run carrier Air India to cut cost and enhance revenue to the extent of Rs 2,000 crore by March before any equity infusion is made in the airline. The decision came in a meeting of the Group of Ministers (GoM) headed by Finance Minister Pranab Mukherjee that met on Thursday.
The government has also decided to monitor the performance of the airline on a monthly basis and have drawn out an interim plan to revive the airline.
“An interim plan to turn around the airline has been put in place. We will monitor the performance of the airline till March and when there is a visible turn around equity infusion will be carried out in the airline,” Civil Aviation Minister Praful Patel said.
Patel, however, did not disclose the quantum of equity that would be infused in the airline. The airline has sought Rs 5,000 crore to bail itself out of the financial trouble.
“This is time of trial of the Air India, everybody who matters should contribute,” Patel said.
Meanwhile, in its accounts published on Wednesday Air India reported an all-time high net loss of Rs 5,548.3 crore for 2008-09 even as the airline’s management appointed consulting firm Booz & Allen to formulate a plan to cut costs and enhance revenues.