Government plans bailout package for Air India

June 24th, 2009 - 9:30 pm ICT by IANS  

Manmohan Singh New Delhi, June 24 (IANS) Civil Aviation Minister Praful Patel Wednesday said the government would support and help bail out the loss-making national carrier Air India, but stopped short of spelling out the size or nature of the package.
Patel discussed a bailout plan with Prime Minister Manmohan Singh. “The prime minister was sympathetic. But he has asked to plan out the strategy, cost cuts, judicious use of resources and restructuring of Air India.”

The minister, however, refused to divulge the bailout package but said “unconditional support to Air India will not be easy.”

He also ruled out “open cheque books” for Air India, and argued that if the government was going an extra mile to help the national carrier, then Air India too should reciprocate in the similar way by means of performance.

Patel also put the onus of the carrier’s performance on its staff and management, and said everyone would now have to work to save Air India from sinking.

Air India, which incurred a loss of Rs.4,000 crore last fiscal and is struggling to cope with a cash crunch, plans to ask for a Rs.10,000-crore (about $2 billion) bailout package from the central government, a senior official told IANS Tuesday.

Airline officials, who discussed the carrier’s financial problems with Patel Tuesday night, will meet top government officials again, seeking help.

“We are looking for at least Rs.10,000 crore bailout package. I am not sure if the government would agree on this,” said the Air India official, who did not want to be named.

Air India had earlier said it was looking for a bailout package worth at least Rs.15,000 crore from the government.

Air India chairman and managing director Arvind Jadhav, Civil Aviation Secretary M. Madhavan Nambiar and other senior ministry and airline officials had met the Principal Secretary to the Prime Minister, T.K.A. Nair, Monday to discuss the issue.

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