AI seeks Rs 5,000 cr equity

The national carrier has suggested that the government should inject Rs 5,000 crore of equity over a period of three years from this fiscal, besides providing guarantee for low- cost working capital loans from banks, official sources said here.

The airline, which is starved of cash, has sought Rs 2,400 crore by the end of March next year, they said, adding that the carrier would need Rs 3,000 crore every three years to meet its expenditure obligations.

In a proposal presented to the Group of Ministers last week, the airline said it could cut down the fleet-size from the present 146 aircraft to 95 over the next two years by introducing new planes to replace the aged and leased ones. The GoM, which met under the chairmanship of Finance Minister Pranab Mukherjee, made it clear to the ailing national carrier that any assistance by the government should be matched by the airline through cost-cutting and revenue enhancement measures.

In a presentation to the GoM on its restructuring and turnaround programme, AI CMD Arvind Jadhav said the carrier would reduce costs by about Rs 3,000 crore and enhance revenues by Rs 2,000 crore annually. The cash-strapped carrier, which is estimated to post losses to the tune of Rs 7,200 crore this fiscal, has proposed several measures to rationalise manpower costs.

While it has spent Rs 839 crore in the first quarter of the current financial year, it has projected spending the same amount in the second quarter and cap it at Rs 650 crore each in the last two quarters, the sources said.

Among the steps initiated by the carrier is the introduction of leave without pay scheme, reduction in overtime and rationalisation of contractual and casual employees.

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