Aviation Ministry to move Cabinet for Air India's bailout

The Civil Aviation Ministry will move the Cabinet this week for its approval to the reconstruction package, including Rs 6,500 crore capital infusion, for Air India.

"As far as financial stress for Air India, which is a government concern, we have moved for financial reconstruction package, including Rs 6,500 crore capital infusion.

"We are moving the Cabinet this week and also asking the Cabinet to give final permission to purchase Dreamliners," Civil Aviation Minister Ajit Singh said in a press conference on the sidelines of India Aviation 2012.

"We will bail it out, but not indefinitely...[the carrier] has to improve its efficiency," the minister added.

Meanwhile, Air India Chairman Rohit Nandan told reporters on the sidelines of a separate function that he national carrier had dues to the extent of Rs 2,500 crore to oil companies, Rs 1,200 crore to airport operators and another Rs 580 crore towards employee salaries.

Ajit Singh said as per the restructuring package some of the short-term loans will be converted to long-term debt and a part of the loan will be converted to non-convertible debentures.

"For the interest part, Government will give guarantee. We had talks with the bankers’ consortium and they have the sanction of the RBI also. It has to be done in next two weeks or so," the minister said.

Replying to a query on Kingfisher Airlines, Singh said the government has no intention to bail out any private airliner.