As Air India’s woes multiply given the shortage of working capital, the group of ministers (GoM) is likely to consider the proposal for the national carrier’s rescue prepared by the civil aviation ministry on Wednesday. Based on the group’s deliberations, the civil aviation ministry is likely to prepare a proposal for the consideration of the Cabinet, senior government officials said.

The carrier has been under tremendous financial stress on account of interest payments for acquisition of 111 aircraft and diminishing revenues. It has accumulated losses up to Rs 7,200 crore till now, as per civil aviation minister Praful Patel’s admission in the Parliament earlier.

“I will take up the matter for immediate infusion of funds in Air India at the earliest before the GoM,” Patel said on the Tuesday on sidelines of a conference.

Official sources said that if the ministerial group clears the proposal, the Cabinet is likely to clear it shortly.

In its proposal, the ministry is likely to seek Rs.2,000 crore as equity infusion this year and Rs.3,000 crore as government support for aircraft acquisition. The bailout plan, which has received in-principle approval of the committee of secretaries (CoS), would be through the induction of equity and the restructuring of high-cost debt into low-cost debt backed by sovereign guarantee.

The airline had been asked to undertake several cost-cutting measures to shore up company’s revenues and restore financial health. However, it has faced difficulties in effecting a pay cut for its employees recently with non-unionised management pilots shunning work protesting 50 per cent productivity-linked cut, causing the airline loss of around Rs 100 crore. Recently the management held meetings with unionised employees to sort the pay cut issue. The airline has not paid the PILs of its employees from September onwards.

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