Cash-strapped Air India holds board meeting as govt mulls to help airline

Cash-strapped Air India's board met in New Delhi on Friday, amid the government considering a financial package to help the carrier, sources said.

After the proposed strategic disinvestment of the airline failed to take off, the government is considering a proposal for equity infusion and possible loan waiver to improve its finances.

The meeting is also the first after induction of leading industrialists -- ITC Chairman Y C Deveshwar and Aditya Birla Group Chairman Kumar Mangalam Birla -- as independent directors on the airline's board.

Sources said Deveshwar attended the meeting but Birla did not turn up.

Details about discussions at the board meeting could not be immediately ascertained.

The Civil Aviation Ministry is in discussions with the Finance Ministry for a Rs 110 billion bailout package for the ailing Air India. The bailout package that the ministry is working on would be utilised to reduce high-cost working capital loans.

As per reports, the ailing airline could seek a loan waiver.

At the end of March 2017, the national carrier had a debt burden of over Rs 480 billion. Of this, it owed Rs 173.6 billion to aircraft leasing companies.

Earlier, Civil Aviation Secretary R N Choubey said that the government would aim to make the airline competitive before making a fresh push towards the disinvestment proposal.

"We would like to make sure that Air India remains competitive and its market share does not go down, which may require capacity induction... We will also ensure that sufficient delegation (of power) is given to the board of directors to decide on operational matters," he had said.

Last month, the government sought Parliament's nod for Rs 9.8 billion in supplementary grants towards equity infusion into the airline.