Final decision on Air India support package in 10 days: Aviation official

The government would take a final decision of the support package sought by Air India in 10 days’ time, news agency Reuters quoted an unnamed aviation official as saying.

The agency added, quoting the same source, that a decision on relief package for other airlines was still under discussion.

Earlier, the finance ministry was reported to have turned down Air India’s Rs 300-billion fund-infusion proposal in the absence of a clear turnaround plan. The civil aviation ministry had sought this package to wipe out the debt obligation of the state-owned airline, which was defaulting on salary disbursements and payments to vendors.

The airline has a total debt of Rs 500 billion. Of that, around Rs 220 billion has been termed unsustainable.

The finance ministry had asked Air India to transfer its non-core assets and subsidiaries to a special-purpose vehicle. Those assets were to be monetised for reducing the company’s unsustainable portion of the debt.