No bailout for Air India unless it cuts costs: Patel
Wednesday, October 21, 2009 (21:25:14) Tags: Business, Aviation, Air India
New Delhi: The Group of Ministers (GoM) on Civil Aviation, which met here today, did not take any decision on equity infusion into the cash-strapped national carrier Air India.
Civil Aviation Minister Praful Patel told reporters after the GOM meeting that the employees and the management of Air India should first come up with a proper cost-cutting plan.
"No decision has been taken by the GoM. Unless employees of Air India come out with a workable plan for cost cutting and revenue enhancement, the government cannot offer any help," Patel said.
He added that the GoM would meet again soon.
The civil aviation ministry has sought Rs.2,000 crore as equity this year along with Rs.3,000 crore under a capital acquisition programme.
The GoM meeting was attended by Finance Minister Pranab Mukherjee, Home minister P. Chaidambaram and Planning Commission Deputy Chairman Montk Singh Ahluwalia, besides the aviation minister.
Patel on Tuesday said he would ask the ministerial group to immediately release funds for the beleaguered carrier as recommended by the committee of secretaries.
Last month, the committee headed by the cabinet secretary cleared Rs.5,000 crore for Air India over the next three years, with a condition that the airline would cut costs and raise its revenue.
The airline last month announced plans to cut performance-related pay by up to 50 percent for over 7,000 employees, including the top management, but the employees are not willing to take a cut. The airline has lost over $1.5 billion since the last fiscal. (IANS)