An additional government equity infusion of Rs 800 crore into ailing Air India is likely, though the condition for doing so isn’t going to be met, confirmed Union Civil Aviation Minister Praful Patel.
“The airline has been able to save only Rs 700-800 crore through cost-cutting and it is very unlikely that the target of saving Rs 2,000 crore through cost-cutting by March could be met,” said Patel, after a meeting of the Group of Ministers (GoM) on the loss-making state carrier.
The government had sanctioned an earlier equity infusion of Rs 800 crore for this financial year, with a condition that the airline would save Rs 2,000 crore by the end of this financial year.
“We are moving the Cabinet for equity infusion of (another) Rs 800 crore. I think by next week the approval should come,” Patel said.
Any further assistance would only be given on achievement of specific revenue enhancement and cost reduction targets by the airline, added the minister.
Air India has been under huge losses of over Rs 7,200 crore and owes Rs 16,000 crore. But, it has been able to capitalise on the overall boom in passenger numbers.
In the third quarter of the current financial year, it registered a 24.8 per cent increase in passenger numbers and a 14.4 per cent rise in load factor in the October-December period. Total revenue increased by 3 per cent to Rs 3,852.1 crore from Rs 3,738.6 crore during the corresponding period last year.
The airline also brought down its quarterly operational losses by 25 per cent, to Rs 864.3 crore from Rs 1,152.4 crore during the same quarter last year. The net loss also showed a 9.7 per cent decline, to Rs 1,473.85 crore.
