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Air India has urged government to provide it with Rs 5,000 crore in the form of additional equity with the promise for cutting down its fleet sized as well as the wage bill of its 31,000 employees.
According to the cash-strapped national air carrier, Rs 5,000 crore should be provided in the form of equity over three years from this fiscal, along with providing guarantee for low- cost working capital loans from banks.
Air India has asked government for providing Rs 2,400 crore by March 2010 with the additional Rs 3,000 crore annually for three years so that it can meet its expenses. It has promised to make its fleet slimmer over a period of two years to 95.
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.
