Govt approves turnaround plan for Air India

In a big boost to ailing Air India, the government today approved a turnaround plan (TAP) to restructure the operations and the finances of the cash-strapped carrier, including infusion of additional equity.

In a big boost to ailing Air India, the government on Thursday approved a turnaround plan (TAP) to restructure the operations and the finances of the cash-strapped carrier, including infusion of additional equity.

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"The turnaround plan of Air India has been approved," civil aviation minister Ajit Singh told reporters after a meeting of the Cabinet Committee on Economic Affairs (CCEA).

The CCEA approved the TAP and the airline's financial restructuring plan (FRP), which includes additional equity infusion by the government.

Besides, the issue of induction of the much-awaited Boeing Dreamliner-787, part of the TAP, was also given the green signal by the CCEA, official sources said.

They said the issue of allowing foreign airlines to invest in Indian carriers could be taken up by the Cabinet next week.

As part of the airline's restructuring plans, the government had announced infusion of Rs 4,000 crore during the current fiscal in the 2012-13 Union Budget. This would raise the airlines' equity base to Rs 7,345 crore.

The SBI-led consortium of 19 banks had last month approved the FRP which includes debt restructuring of Rs 18,000 crore by the banks and a committed equity infusion by the government.