State-owned Alliance Air has sought a fresh working capital allocation of Rs 700 crore from the Centre, sources told Fe.
Legacy issues such as high debt as well as supply chain issues with global OEMs have been ailing the divestment-bound airline, which has a debt of about Rs 4,000 crore.
Last year, the Central government had injected Rs 600 crore into the airline. The funds have been fully utilised to service interest liabilities.
As of now, the airline has 21 aircraft, of which five are grounded due to engine issues, and some operations are compromised because of weather-related operational concerns in far-flung areas such as the northeast.