BBC: Indian Government approves plan to save Air India

Posted: April 12, 2012 in Airlines, Asia, India
Tags: , , , , , , ,

The Indian government has approved a debt restructuring plan to save Air India, the country’s national airline.

Civil Aviation Minister Ajit Singh said 30bn rupees would be injected into the airline by 2020.

Civil Aviation Minister Ajit Singh said 30bn rupees would be injected into the airline by 2020.

Civil Aviation Minister Ajit Singh said 30bn rupees ($5.9bn; £3.7bn) would be injected into the airline by 2020.

But there will be many checks and targets that the company will need to achieve, the minister said. Mr Singh said the restructuring was necessary as the government could not continue to spend public money on the loss-making airline.

Mr Singh told reporters after a meeting of the Cabinet Committee on Economic Affairs that around 7.4bn rupees of Air India’s assets would be converted into non-convertible debentures.

The debt-ridden airline has outstanding loans and dues of 67.5bn rupees.

In February, three state-owned oil firms – Indian oil, Bharat Petroleum and Hindustan Petroleum – halted supplies to the airline for almost four hours for non-payment of dues. Last year too, oil firms had put the airline on a cash-and-carry deal, which meant that Air India had to pay every time it refuelled its planes, rather than get a 90-day grace period usually given to make payments.

The firms restored the credit limit on assurances from the government that payments would be made on time….

Read the full BBC story here….


BBC News
12 April 2012


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