Air India may seek Rs 4,000-cr bailout

Air India may seek a revised rescue package of Rs 4,000 crore from the government at a meeting of its board later this month.

The package will be in the form of both additional equity and long-term loans, a source closely connected with the development said.

“The Cabinet note for providing an additional equity of Rs 1,250 crore is ready and approval is expected shortly,” the source said.

Additionally, Rs 2,750 crore worth of long-term loans from banks and other financial institutions is also on the cards, the source said, adding: “The package has to be announced before the proclamation of the general elections and subsequent imposition of the model code of conduct.”

In the earlier package, the state-owned carrier had suggested an equity infusion of Rs 1,000 crore and a soft loan of Rs 1,500 crore to fund its fleet acquisition programme.

The national carrier’s board is meeting in Delhi next week to adopt its annual accounts.

“Air India’s board is likely to adopt its accounts at its meeting on February 17. Following this, the same will be adopted by the annual general meeting, also scheduled for the same day, the source said, adding that the airline’s losses for 2008-09 fiscal are likely to be around Rs 2,500 crore.