Cabinet to take up AI equity infusion issue after RBI report

A Group of Ministers decided that the Cabinet would take up the issue of infusing additional equity of Rs 6,600 crore in Air India

A Group of Ministers (GoM) on Friday decided that the Cabinet would take up the issue of infusing additional equity of Rs 6,600 crore in Air India and also the acquisition plan for 27 Boeing 787 Dreamliner aircraft,only after the Reserve Bank of India gives its views on debt restructuring plan for the ailing national carrier.

A report on (Air Indias) debt restructuring prepared by the Committee of Officers will be reviewed by the RBI within a week. Only after that will any decision be taken, Civil Aviation Minister Vayalar Ravi told reporters here after the meeting of the GoM headed by Finance Minister Pranab Mukherjee.

The Civil Aviation Ministry has already moved a proposal for additional equity infusion of Rs 6,600 crore for the ailing carrier to enable the airline clear its massive dues. Government has already infused equity worth Rs 2,000 crore in the last two years.

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The debt-ridden carrier has outstanding loans and dues of Rs 67,520 crore,of which Rs 21,200 is working capital loan,Rs 22,000 crore is long-term loan on fleet acquisition,Rs 4,600 is vendor dues and an accumulated loss of Rs 20,320 crore,according to latest official figures.

After the central bank reviews the report by the committee of officers,the issues pertaining to equity infusion and also the acquisition of Dreamliners,orders for which were placed in 2005-06,would be tabled before the Cabinet,Ravi said.

The Air India Board had in August decided to go ahead with the acquisition of B-787s and sought government nod for it. As per the original 2005 order,the airline wanted 27 aircraft,the list price of which stood at $185.2 million last year. The minister had earlier said the airline did not have the resources for such a large order.

Even as the airline struggles for more funds,a section of the airlines pilots on Friday warned of an agitation to press their demand for immediate payment of salary and incentives,kept pending for the last few months,and to solve issues pertaining to their career progression.

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A decision on the mode of agitation would be taken after the Indian Pilots Guild (IPG) put the issue to vote at their meeting in Mumbai.

Investigators, including a bomb squad, combed the site. (Representational)

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