The Union Cabinet will take a decision on the issue of additional equity infusion of Rs. 6,600 crore in the ailing national carrier, Air India and also take a call on the airline’s plan to acquire 27 Boeing 787 Dreamliners. For helping the Union Cabinet in the decision making process, it will be given views of the Reserve Bank of India on debt restructuring plan for the cash-strapped Air India.
The decision to refer the key financial issues, plaguing the national carrier, to the Union Cabinet for the decision was taken on Friday at a meeting of a Group of Ministers (GoM), led by Finance Minister Pranab Mukherjee, which is looking into troubled financial condition of Air India.
"A report on (Air India's) debt restructuring prepared by the Committee of Officers will be reviewed by the RBI within a week. Only after that will any decision be taken," Civil Aviation Minister Vayalar Ravi told journalists after the meeting.
The Civil Aviation Ministry has already moved a proposal for additional equity infusion of Rs 6,600 crore this fiscal for the ailing carrier to enable the airline clear its massive dues. Government has already infused equity worth Rs 2,000 crore in the last two years.
The debt-ridden carrier has outstanding loans and dues of Rs 67,520 crore, of which Rs 21,200 is working capital loan, Rs 22,000 crore is long-term loan on fleet acquisition, Rs 4,600 is vendor dues and an accumulated loss of Rs 20,320 crore, latest official figures showed.
Once the RBI reviews the report by the Committee of Officers, the issues pertaining to equity infusion and also the acquisition of Dreamliners would be tabled before the Cabinet, Mr. Ravi said.
Air India Board had in August decided to go ahead with the acquisition of B-787s and sought the government approval for it. As per the original 2005 order, the airline wanted 27 aircraft, the list price of which stood at USD 185.2 million last year. The Minister had earlier said the airline did not have the money to go for so many aircraft at present.
Mr. Ravi has maintained that 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 earlier said. The last GoM meeting was held on August 18 when the airline's credit limit by the state-run oil marketing companies (OMCs) was extended by two-three months.
It is learnt that the GoM was in favour of further extending the credit time limit for the oil companies by another three months. The GoM has also considered the option of either truncating the order of 27 Dreamliners or going for the sell and buy back route. However, the final decision will be taken by the Union Cabinet.
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