More funds for cash-strapped Air India is on the anvil with the Group of Ministers (GoM) on Monday approving in principle additional equity infusion of Rs 1,200 crore and payment of Rs 532 crore for operating VVIP and rescue flights.
Against the backdrop of the state-owned airline's massive cumulative loss and debt burden of about Rs 67,000 crore, the GoM headed by Finance Minister Pranab Mukherjee had a meeting and discussed finance issues confronting the ailing carrier.
After the meeting, Air India CMD Arvind Jadhav told reporters that the GoM has in-priciple granted approval for the Rs 1,200 crore equity infusion.
The GoM has also granted approval for payment of Rs 532 crore for operating VVIP and rescue flights for the government and formation of strategic business units for ground-handling, he said.
Civil Aviation Minister Vayalar Ravi told reporters the GoM will meet again next week to discuss other finance issues.
Jadhav said the GoM also asked the finance committee to prepare a note on Air India's turnaround plan.
Prime Minister Manmohan Singh recently said he would ask Mukherjee as the head of GoM to take "expeditious decisions" to revamp the airline.
The national carrier has to repay a whopping Rs 20,415 crore worth of loans before the end of this fiscal year, official sources said.
As per the latest estimates, the ailing carrier was facing a net cumulative loss of Rs 20,320 crore between April 2007 and March 2011.
Its debt burden stood at Rs 46,950 crore - Rs 20,185 crore worth of aircraft loans, Rs 22,165 crore working capital loans and over-dues of Rs 4,600 crore. Its cumulative loss and debt burden comes to a whopping Rs 67,270 crore.
To overcome this financial rot, Air India is seeking an upfront equity infusion of Rs 6,600 crore from the government for immediate relief and another Rs 5,736 crore to fund cash deficits spread over ten years till FY 2021.