Govt to bail out Air India with Rs 1,000-cr package

ROUGH SKIES: Praful Patel says Air India needs help as aviation industry is in crisis.

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Hyderabad: The Government will infuse Rs 1,000-1,500 crore into state-owned carrier Air India as capital and may also offer another Rs 100 crore as working capital to bolster its finances.

"There is need to infuse further liquidity to make Air India a viable entity," said Civil Aviation Minister Praful Patel on Wednesday in Hyderabad.

.

"It is owned by the Government and as like any owner of a company, the government should be ready to infuse liquidity into it. Air India has a very small liquidity base of Rs 145 crore and with an estimated aircraft of Rs 40,000 crore it is absolutely unacceptable,” he said.

Asked about plans for the Air India IPO, Patel said there is no discussion on public listing and that there was "no point in talking about that at this juncture."

While admitting that the issues that were now plaguing the aviation industry in India could best be resolved by a market and price regulator, he said: “It will take time as some airlines want it and others don't want it and we need to thrash out all issues.”

Earlier on Wednesday, Jet Airways chairman Naresh Goyal had hinted that India needs an aviation market regulator.

Patel said that an Airport Regulatory Authority Bill has already been prepared and will be tabled in parliament soon.

Patel said the Government wouldn’t oppose the tie-up between Jet Airways and Kingfisher Airlines. “Cooperation between two major airlines should be within rules and regulations," he said.