New Delhi: Air India would get additional fund of Rs 30,000 crore from the Central Government to turn around the airline's fortunes following the Cabinet approving a financial restructuring plan for the company. Civil Aviation Minister Ajit Singh said that the aviation industry was in trouble in India and after the restructuring plan Air India, which had not been able to pay salaries to the employees for some time, would see better days with the airline getting Rs 6,750 crore in 2012 alone.
"There is good news for Air India and the passengers. Air India and some other airlines are in trouble. The Cabinet had approved a turnaround plan and financial restructure plan for Air India. Airlines were restricted from being part of foreign direct investment. The Group of Ministers that met on February 9 February allowed 49 per cent FDI in aviation. It would go to the Cabinet very soon," said Ajit Singh in New Delhi on Thursday.
"As part of the financial restructuring plan for Air India, Central Government will infuse a lot of money. About Rs 30,000 crore will be infused in Air India till 2020. But it will have a lot of checks at different levels," said Singh.
The Civil Aviation Minister also announced that it has been decided to hive off Air India's engineering and ground handling services into two subsidiaries. Goods handling and engineering departments would be separate and according to the industry norms, he added.
According to the restructuring plan 7,000 Air India employees would be shifted to engineering section and 12,000 would be moved to the transport division.
Putting to rest the speculations that after FDI in aviation is allowed, the government will no longer control Air India, Singh said that the airline will continue to be owned by the government.
Asking Air India employees to cooperate, the minister said that Air India had to rationalise the cost, which has to be in line with the industry norms otherwise the government would not be able to use the public money for the aviation company.
"Restructuring of Air India is necessary. The government will not and cannot continue to spend public money on it. The government will not infuse public money in Air India indefinitely. The airline will have to come in line," he added.
Singh hoped that cash profit would be achieved by 2018 and by 2020 Air India would become profitable.
Announcing that Air India would receive its first Boeing 787 Dreamliner aircraft in the next two weeks, he said that 27 such planes would be inducted into the fleet.
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