Praful meets Montek, Rs 1,200 cr may be released to AI

Civil Aviation Minister Praful Patel today met Planning Commission Deputy Chairman Montek Singh Ahluwalia amid indications that the government will release additional equity of Rs 1,200 crore soon to Air India.

This will be the second tranche of equity infusion after Rs 800 crore was released in the last financial year.

Patel, who was accompanied by Civil Aviation Secretary SNA Zaidi and Air India CMD Arvind Jadhav at the meeting that lasted over 30 minutes, refused to share what transpired.

Sources said the issue of additional equity infusion in Air India was on the cards for several months now, even though the national carrier has not achieved some key targets for cost-cutting and revenue enhancement set by the government as a condition.

Independent directors on the Air India Board had raised the matter with Principal Secretary to the Prime Minister T K A Nair last month.

The decision to release the amount would come up before the Cabinet Committee on Economic Affairs in the next few weeks. A Cabinet note on equity infusion has already been circulated by the Civil Aviation Ministry.

Air India posted a net loss of Rs 5,551 crore in the year ended March as against the net loss of Rs 7,189 crore in 2008-09. Its total expenditure also decreased by 8 per cent and stood at Rs 19,035 crore compared to Rs 20,668 crore in the last fiscal.

The airline also reported a decline in its operating losses by 39 per cent from Rs 5,672 crore in 2008-09 to Rs 3,472 crore in 2009-10.