Bailout package for Air India on cards

July 14th, 2008 - 8:30 pm ICT by IANS  

A file-photo of Manmohan Singh

New Delhi, July 14 (IANS) National Aviation Co of India Ltd (NACIL), which runs the state-owned carrier Air India, may get a bailout package soon to meet the losses incurred due to rising aviation fuel prices and operational costs, a top government official said. Civil Aviation Minister Praful Patel during his meeting with Prime Minister Manmohan Singh last month had asked for a bailout package of Rs.23 billion ($534.8 million) for Air India.

The minister sought Rs.13 billion towards working capital needs and Rs.10 billion as soft loan. NACIL is incurring a loss of Rs.140 million everyday, said an aviation ministry official, who did not wish to be identified.

But the government is yet to finalise the package, he said.

He added that high fuel costs were here to stay, and the aviation industry would have to either increase fares or see many airlines shutting down operations, if the government did not help them. “Airlines are already facing difficulties owing to high aviation fuel and operational costs,” he said.

Patel had earlier favoured a public issue for NACIL after the merger of Air India and Indian. NACIL had plans to divest 10-15 percent equity to raise funds. But the public issue plan was put on hold.

Tags: , , , , , , , , , , , , , , , , , , ,

Posted in Business |

Subscribe