THE INDIAN government may pump another $450m (£284.92m) into Air India in a bid to revive the ailing state-owned carrier, a minister said today.
The government injected Rs8bn ($180m/£113.98m) into the airline in the last fiscal year to March 2010 and already expects to put in another Rs12bn ($270m/£171m) this year.
“We can look at pumping in another 20 billion rupees (450 million dollars) later,” Aviation Minister Praful Patel told reporters in New Delhi, giving no timeframe.
The airline’s one-time dominance of India’s skies has been eroded by a clutch of new private airlines and agreements that have allowed more foreign carriers to serve the country.
But Patel said Air India’s fortunes were improving thanks to a growth in air traffic after the global financial crisis sent the sector into a tailspin.
The airline, which merged with its domestic state-owned counterpart Indian Airlines in an attempt to cut costs, needs the money to modernise its fleet and battle fierce competition.
The carrier has placed orders for 111 new aircraft – 43 from Airbus and 68 from Boeing – worth $11bn (£6.97bn).
Air India has said it hopes to swing into profit in 2014-15 as its turnaround plan takes shape. The plan involves promoting the growth of its low-cost arm Air India Express, but no job cuts among its heavily unionised workforce of 31,000.
Air India is the third largest operator of domestic passenger services, with about an 18 per cent market share behind private airlines Jet and Kingfisher.
