Home Economy Air India to get Rs.15 billion from government

Air India to get Rs.15 billion from government


Hyderabad : The government will infuse Rs.10-15 bn ($375 million) into state-owned carrier Air India as capital and may also offer another Rs.10 billion as working capital to bolster its finances.

While refusing to term the exercise a bailout, Minister for Civil Aviation Praful Patel told reporters here Wednesday: “The government is the owner and as owners if the carrier needs capital we have to invest.”

Patel was addressing a media conference after inaugurating India’s first civil aviation air show India Aviation 2008.

While admitting that the issues that were now plaguing the aviation industry in India could best be resolved by a market and price regulator, he said: “It will take time as some airlines want it and others don’t want it and we need to thrash out all issues.”

Earlier Wednesday morning Jet Airways chairman Naresh Goyal had hinted that India needs an aviation market regulator.

While private sector airlines want a market regulator in place – a body on the lines of the Telecom Regulatory Authority of India (TRAI) that has done wonders for the growth of the telecom sector in India – state-owned Air India is opposed to the idea.

Patel said that an Airport Regulatory Authority Bill has already been prepared and will be tabled in parliament soon.

“That took three years to work out. I am not saying that a regulatory body for airlines will take that long but it will not happen at least in the next two or three months,” he said.

Patel said that the panel set up by Prime Minister Manmohan Singh and headed by the cabinet secretary to look at the turbulence that the aviation industry was currently facing has also been asked to address the issue of a market and price regulatory authority for the aviation industry.

He said he was very disappointed by the approach taken by other ministries and most state governments with regard to understanding the critical role that the aviation industry plays in economic development.

“It is very disappointing and disturbing that they are not taking any positive steps towards reducing the prices of ATF and bringing down state level taxes to help the cause,” he said. The fuel used by planes is called aviation turbine fuel or ATF.