With the civil aviation ministry reported to have sought a nod from the Cabinet for a Rs 2,500 crore bailout package for the National Aviation Company of India Ltd (Nacil), which runs the ailing national carrier Air India, industry observers say if the authorities act fast, Air India will be able to take advantage of the slump in the global aviation market by offering rock bottom fares to lure more travelers.

Air India has not only seen a dip of 16% on its international network but also on its domestic routes by 30%.

Says an analyst from a Mumbai-based broking firm, ?Speed is needed to tackle the grim situation at Air India. The carrier has lost its passengers to international carriers who operate to and from India with an attractive fare structure. If there is a fund infusion soon, the flag carrier will be able to regain some of its lost glory in terms of market share, both in domestic and international travel market.?

International carriers like Hong Kong?s leading airline Cathay Pacific, Germany-based Lufthansa, carriers like Emirates and Etihad are giving a stiff competition to Air India on the international sector due to increase in their flight frequencies and healthy load factors.

Back home, private carriers like Jet Airways and Kingfisher Airlines, which have just started positioning itself in the international skies, are likely to make a dent into Air India?s market share.

An official from Air India said, ?The financial bailout has seen procedural delays for quite sometime. But things are moving fairly now. In a recent board meeting held in Mumbai, we had a detailed discussion on our inherent strengths, competition from domestic and international carriers and the benchmarking required for our sustenance which can be met with an inflow of cash in the organisation.?

Also, once funds are infused, measures will be taken for the successful turnaround of the carrier, added the executive.

It may be recalled that Air India had posted losses to the tune of Rs 2,200 crore in the 2007-08 fiscal and there has been a consistent effort to inject equity into the organisation.

The state-run carrier has also been deferring its IPO (initial public offering) plans due to uncertain market conditions.