Air India board to meet Tuesday

November 29th, 2011 - 3:25 pm ICT by IANS  

State Bank of India New Delhi, Nov 29 (IANS) Cash-strapped national carrier Air India’s board is to hold discussions Tuesday on the airlines’ performance and a revival plan.

“The board is scheduled to meet today (Tuesday) to review the airlines’ performance, as well as various steps to improve its viability,” an Air India official told IANS.

According to the official, the meeting is scheduled to be held at the company’s New Delhi-based headquarters — Airline House. It will discuss issues related to route rationalisation, cabin restructuring and human resource (HR) integration.

“Some major operational issues– route rationalisation, cabin restructuring are most likely to come up. Apart from these, HR integration and problems of the unions will also be discussed,” the official said.

Other issues like a new scheme for voluntary retirement (VRS), aircraft lease back options and cost saving measures are also likely to crop up in the meet.

The meet comes in the wake of an expected go-ahead by the Reserve Bank of India (RBI) for the financial restructure plan (FRP) for the airline.

The FRP envisages restructuring of the Rs.42,923.16 crore debt the airline has accumulated for working capital and aircraft acquisition from a consortium of banks, which includes State Bank of India, IDBI and Bank of Baroda.

Earlier, Civil Aviation Minister Vayalar Ravi said Finance Minister Pranab Mukherjee-led group of ministers (GoM) which is looking into the airlines’ turnaround and financial restructure plan is awaiting the RBI views.

The GoM is also expected to meet Tuesday to decide on further equity of Rs.6,750 crore into the airline and to review the airlines’ turnaround plan.

The government has so far infused fresh equity of Rs.3,200 crore into the airline.

Currently, the national carrier has a total debt of Rs.43,777 crore, including loans and dues it owes to vendors like oil firms and airport operators.

It has aircraft acquisition loans worth Rs.21,412.06 crore and Rs.21,511.10 crore in working capital dues, while it also owes a total of Rs.2,742 crore to various vendors.

The airline further owes Rs.485 crore in interest cost on working capital loans, as well as Rs.200 crore interest on loans for aircraft purchase, and Rs.350 crore towards its employees’ wages.

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