Friday, December 30, 2011

Govt proposes Rs 33,000 cr aid for Air India by 2017

New Delhi: The Aviation Ministry proposes to provide Rs 33,000 crore to cash-strapped Air India by 2017 as part of the government's 12th Five-Year Plan, according to a working group report seen by Reuters.
The proposed aid would include an equity infusion of Rs 19,900 crore into the loss-making carrier and Rs 11,200 crore for aircraft projects, including purchases and maintenance, the report shows.
The report says the total debts of India's airlines are expected to rise to $20 billion in 2011-12 ending March as they struggle with rising oil prices, high sales taxes on jet fuel and below-cost pricing driven by fierce competition.
State-owned Air India, which is burdened with a debt of $4 billion, said on Thursday its board had approved issuing Rs 7,500 crore worth of shares to its lenders as part of its financial restructuring. It gave no details on the exact stakes lenders may own.
30/12/11 Reuters/Business Standard
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