Air India may get Rs 10,000-cr Budget lifeline

Our Bureau New Delhi | Updated on March 12, 2018 Published on February 23, 2012

Cash-strapped national carrier Air India is likely to get a Rs 10,000-crore package in the Budget. This includes equity infusion beside other support.

A person familiar with the development told Business Line, “The package is for 2012-13. It may include equity infusion of Rs 6,600 crore as suggested by the Group of Ministers as a part of Financial Restructuring and Turnaround Plan.” The Cabinet is expected to consider this package shortly, thereby clearing the way for inclusion of the provision in the Budget.

Sources also indicated that the airline is unlikely to get more equity during the current financial year ending March 31, 2012. The Government invested Rs 1,200 crore during this year which took the equity base to Rs 3,345 crore.

A Group of Ministers has already recommended issuance of bond by the national carrier in place of preferential shares. The size of the bond issue will be Rs 7,400 crore and it will have a sovereign guarantee.


On the other hand, the much awaited arrival of DreamLiner (Boeing 787) type aircraft is now only likely to be inducted by the end of April. “The aircraft manufacturer has said that delivery could start in April 2012. However, the Cabinet has to take a call on the order placed earlier,” he added.

There are two options – either to take delivery of all the 27 aircraft as per the order placed, or halve it because of financial constraints.

Air India, in the mean time, has already started preparing a schedule on the basis of new aircraft. This involves flights up to and more than six hours.

“Actual implementation will depend upon how many planes we receive and when,” an airline official said. The airline is expected to receive 11 B787 aircraft in 2012, three in 2013, 11 in 2014 and two in 2015.

Delhi and Mumbai will be operational bases for the new aircraft. The schedule has been proposed on the assumption that the aircraft will fly 4,500 hours per annum. It means daily utilisation of 12-13 hours. Such a utilisation schedule can help the airline to go for even two international stations with the help of one aircraft.


Published on February 23, 2012
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