Centre May Give Rs 802 Cr To Air India

New Delhi, Jul 5: With the decision on infusing Rs 1,200 crore as equity in Air India expected soon, Government may consider giving the airline a little over Rs 800 crore additionally as dues for
centre may give rs 802 cr to air india - India TV
PTI 05 Jul 2011, 19:40:38 PM IST

New Delhi, Jul 5: With the decision on infusing Rs 1,200 crore as equity in Air India expected soon, Government may consider giving the airline a little over Rs 800 crore additionally as dues for operating flights for VVIP and evacuation operations carried out by it, sources said today. 

Though Air India has billed an amount of Rs 1,222 crore for dedicating five Boeing 747-400 planes for VVIP operations, the government could give the ailing airline Rs 802 crore for the operation of three aircraft, they said.

The issue is understood to have come up for discussion at a meeting here of a Committee of Secretaries (CoS) headed by Cabinet Secretary A K Seth.

The CoS is also understood to have asked the national carrier to finalise its Turnaround and Financial Restructuring Plans and present it to the Civil Aviation Ministry in the next couple of days, so that the Group of Ministers (GoM) led by Finance Minister Pranab Mukherjee can take it up next week. 

After ratification of these plans by the GoM, a proposal to infuse Rs 1,200 crore is likely to be placed before the Cabinet Committee on Economic Affairs for approval. 

The meeting of the CoS, which also has Secretaries of Economic Affairs, Expenditure, Financial Services and Planning Commission representatives as members, was also attended by Civil Aviation Secretary Nasim Zaidi and AI CMD Arvind Jadhav. 

Prime Minister Manmohan Singh recently told a select group of editors that he would request Mukherjee to expedite measures to strengthen the national carrier. 

The government is now considering exclusively using four Embraers and two Boeing Business Jets, maintained by the Indian Air Force, for VVIP operations depending on the range of flights and the size of delegations.

This step, the sources said, would take a major burden off the shoulders of the cash-strapped Air India as part of the efforts to make it financially viable.

The GoM is likely to meet early next week to take a final view on the entire gamut of problems and issues facing Air India, they said.

In the last five years, Air India operated 47 VVIP flights for which the Boeing 747-400s were withdrawn from commercial services for a total of 313 days, they said. 

The airline has estimated that the total billing for VVIP operations for this period was Rs 1,222 crore. Of this, the cost of maintaining these five planes was put at Rs 866 crore, the capital expenditure including for standby aircraft was Rs 206 crore and a cash cost of Rs 150 crore.  These four-engined planes were preferred for VVIP operations for security reasons.

Air India is planning to dispose off these fuel-guzzling aircraft as these would not be viable for commercial operations, the sources said.

As the market price for these aircraft at present hovered around USD 15-20 million per piece as against USD 30 million due to a glut of similar planes in the market, the airline is waiting for the right time to sell them off, they said.

The glut of these planes in the international market has been caused by the bankruptcy of Japan Airlines (JAL). PTI

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