Air India bailout plan hits snag
The proposed bailout package for the state-run carrier Air India is unlikely to be announced before July.india Updated: Mar 05, 2009 21:58 IST
The proposed bailout package for the state-run carrier Air India is unlikely to be announced before July.
The package would be a mix of equity (Rs 1,000 crore) and soft loan (Rs 1,300 crore).
Analysts have pegged Air India’s losses for the current financial year at Rs 2,200 crore.
“The airline has already submitted a plan for the proposed bail out package as they are in need of a financial support. The process is on but the package will not be announced before the new government assumes office,” a source in the government said.
Air India is in poor financial health because of low passenger load factor as well as the high cost of aviation turbine fuel last year. One in every three seats remained vacant in Air India’s domestic flights during the last six months. Fuel price had touched Rs 71,000 per kilolitre in Delhi last year, before falling to Rs 27,000 per kilolitre now.
The package will be utilised for working capital and fleet financing of the airline, which is acquiring 111 aircraft to expand its fleet further.