GoM meet on Air India Friday

October 27th, 2011 - 10:02 pm ICT by IANS  

Pranab Mukherjee New Delhi, Oct 27 (IANS) The group of ministers (GoM) led by Finance Minister Pranab Mukherjee looking into Air India’s troubled financial situation will meet Friday, officials said.

The meeting was originally scheduled for Thursday, a civil aviation ministry official told IANS.

According to an Air India official, the GoM would primarily look into the airline’s performance as well as consider granting an additional equity to the flag carrier.

The official did not divulge details of the equity to be granted but said the grant would be substantial.

“The GoM would also consider our proposal of converting some of our short-term loans into long-term loans, thereby allowing us to save Rs.900-1,000 crore in interest payments per annum,” the airline official said.

The GoM would also discuss the airline’s order of 27 Boeing Dreamliners it placed in 2005-06.

Recently, Civil Aviation Minister Vayalar Ravi said the government was not considering selling its stake in Air India.

“My first priority as a civil aviation minister is to bring Air India in no-profit, no-loss (situation),” he had said.

The last GoM meeting took place Aug 18 when the airline’s credit limit by the state-run oil marketing companies (OMCs) was extended by two-three months.

Earlier, the OMCs had put the flag carrier on a cash and carry basis — which meant that the airline would have to pay every time it bought fuel from these companies.

Currently, the airline owes Rs.2,300 crore to the OMCs, from whom it buys Rs.17 crore worth fuel daily.

The GoM was formed to look into the airline’s turnaround and financial restructuring plan, which is currently being reviewed by a sub-committee of secretaries.

According to official figures, Air India’s cumulative losses amounted to Rs.22,165 crore, apart from a Rs.22,000 crore debt burden to buy new aircraft. The debt-ridden carrier has to pay almost Rs.3,200 crore in interest to its lenders.

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