Government rules out bailout package for National Aviation Co.December 29th, 2008 - 10:02 pm ICT by IANS
Kolkata, Dec 29 (IANS) The central government Monday ruled out any bailout package for National Aviation Co. of India Ltd (Nacil), which runs the country’s flagship carrier Air India, but said it could be given the benefit of duty cuts.”The government won’t provide any bailout package for Nacil. There wouldn’t be any direct financial assistance, but help in other forms like reducing duties is being done,” Civil Aviation Minister Praful Patel said on the sidelines of the foundation stone-laying ceremony of the Kolkata airport upgrade here.
Nacil recently projected a loss of Rs.21.56 billion for the current fiscal.
The company had sought a bailout package of Rs.23.5 billion to help it tide over the shortfall.
What has also put the airline in a financial squeeze is its ambitious plans to upgrade its fleet with an investment of Rs.440-billion with a limited equity base of Rs.1.45 billion.
Faced with the acute funds crunch, Nacil approached the aviation ministry with a proposal for equity infusion of Rs.13.5 billion and another Rs.10 billion as soft loan.
Patel also urged the airlines to operate to and from the Coochbehar airport in northern West Bengal.
“No airline has come forward to provide airlink to the Coochbehar airport. So we are requesting them to provide the same,” he added.