Air India gets Rs 1,200cr infusion

The Indian government on Thursday approved an equity infusion worth Rs 1,200 crore to save its afflicted national air carrier asking the management to rationalise the wage structure for its 25,000 employees.

Air India over the last few months has seen its condition become more ominous with deferred salaries for employees and desperate cost-cutting measures amidst an outstanding debt of about Rs 19,000 crore.

On Monday, Aviation Minister Praful Patel had said that the state-run carrier seeks 20 billion rupees from the government for fiscal year 2012.

The Cabinet Committee on Economic Affairs on Thursday approved the infusion of Rs 1200 crore as equity while expressing hope that the funds would give much needed impetus to the state-run carrier for its revival plan.

The new backage comes following the Rs 800 crore released by the government in February this year.

Announcing the additional infusion on Thursday, Patel said, “This will not only help restructuring the airline, but will also shore up its finances.”

According to reports, the new package, to be released in a phased manner, is expected to be used not to strengthen the airline’s equity base but instead for settling outstanding dues.