National Aviation Company Ltd, which runs Air India, will receive a government grant in the form of equity infusion of Rs 400 crore by January.
“The GoM (Group of Ministers) has recently assured support to the National Carrier in the form of equity infusion and the first instalment of Rs 400 crore is expected by January 2010,” said a release from the airline.
The GoM headed by Finance Minister Pranab Mukherjee decided to infuse Rs 800 crore in the form of equity into the airline initially and would monitor its performance monthly. Further grants will depend on the cost-cutting measures taken by the airline.
The grants will also be cleared by Parliament, said a senior government official.
The operational losses of the carrier are Rs 4,000 crore and the airline is trying to cut that drastically.
Meanwhile, the airline is facing a strike threat from the Indian Commercial Pilots Association, representing 800 of its pilots. The pilots are demanding that various due incentives and allowances be paid without delay.
The first round of conciliation process before the Central Labour Commissioner between the airline management and the pilots ended without result and both sides are to appear before the CLC on November 20.
