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Govt approves Turn Around Plan for Air India with 30 thousand crore infusion




Government approved a Turn Around Plan, TAP and Financial Restructuring Package, FRP with a thirty thousand crore rupee infusion over a nine year period for cash trapped Air India. 

The plan envisages a massive fund infusion into the Airline, debt restructuring and higher operational efficiency. Civil Aviation Minister Ajit Singh said the Cabinet Committee on Economic Affairs has approved an upfront equity support of 6,750 crore rupees to Air India. He said, Air India will also be able to gain further equity for cash deficit support of 4,552 crore rupees till 2021. He said the Airline will also be able to raise equity for the already guaranteed aircraft loan of 18,929 crore rupees till 2021. 

Air India has been allowed to raise government guaranteed non-convertible debentures of 7,400 crore rupees. Air India currently has outstanding loans and dues worth 67 thousand 520 crore rupees.

The government has also approved operationalisation of Air India Engineering Services Limited (AIESL) and Air India Air Transport Services Limited (AIATSL) as new Subsidiary companies of Air India. 

Mr. Ajit Singh said this would help hive off Maintenance, Repair and Overhaul MRO business of AIESL and also to tap the potential of 1.5 billion US dollars MRO business in the Asia Pacific Region. About 7000 employees of Air India will migrate to this new MRO subsidiary company. Government has also approved induction of 27 Boeing Dreamliners into Air India.



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