Cabinet Committee on Economic Affairs approved Equity Infusion of Rs.1200 crore into Air India

The Cabinet Committee on Economic Affairs (CCEA) on 4 August 2011 approved equity infusion of Rs.1200 crore into the cash-strapped national carrier Air India. Air India had so far received financial assistance amounting to Rs 2000 crore in the last two financial years while its cumulative loss and debt burden is around Rs 67000 crore.

The equity induction would not only ease the cash flow situation of the company Air India which is passing through critical financial crunch. The cash flow would also preclude borrowings from the markets at high costs.

CCEA’s approval followed Prime Minister Manmohan Singh assured that salaries, along with productivity-linked incentives of the employees who have not been receiving their dues for June and July, would be paid soon.
The airline has a debt of Rs.4695 crore on an equity base of Rs.2145 crore.