Debt-laden Air India has been given a lifeline by the government in the form of a budgetary allocation of Rs 7,069 crore. The allocation consists of equity infusion of Rs 6,500 crore and a plan outlay of Rs 569 crore, a civil aviation ministry statement said.
Air India, which has a debt of about Rs 44,000 crore, is looking to turn around operations on the back of achieving better operational efficiencies, increasing passenger revenues and periodic equity infusion from the government.
According to an Air India official, the airline had asked the government to compensate with Rs 780 crore for forex losses on account of currency fluctuation in FY13 and 2014. This amount was requested by the airline in addition to the equity investment by the government, which includes Rs 30,000-crore equity infusion from the government over nine years starting 2012-13, as per the financial restructuring plan of the airline.
The government had in the past earmarked Rs 6,750 crore in FY13 and Rs 6,000 crore in FY14 in the form of equity infusion to Air India. In the interim Budget, the government had allotted Rs 5,500 crore to the airline, of which it has already received Rs 1,375 crore.
In addition, the government had allocated Rs 9,474 crore for the civil aviation ministry, including investments in public enterprises for the FY15, up from revised estimate of Rs 8,502 crore in the last fiscal.
The government has allocated Rs 50 crore as budgetary support to civil aviation regulator Directorate General of Civil Aviation (DGCA) to pursue several plan schemes like building 200 no frill airports at tier 2 and tier 3 cities and towns in the next 20 years; identifying the suitable low cost model to build 15 additional greenfield airports; developing existing airports in metros and non-metro cities through PPP mode to enhance air connectivity.