New Delhi, April 11: The cabinet committee on economic affairs may take a decision on Air India’s turnaround plan, including infusion of Rs 4,000 crore in fresh equity, at a meeting scheduled tomorrow.
Last month, a consortium of banks led by the State Bank of India had approved the airline’s financial restructuring plan.
The induction of the Boeing Dreamliner planes, which is part of the turnaround plan, may also be considered by the cabinet, officials of the civil aviation ministry said.
As part of Air India’s restructuring, the government has decided to infuse Rs 4,000 crore as additional equity during the current fiscal, raising the equity base to Rs 7,345 crore.
The cabinet is also likely to decide on closing down the defunct state-run feeder air service, Vayudoot, by compensating Air India for its earlier losses.
Vayudoot, launched in 1981 and conceived to operate in the Northeast, used to fly to over 100 destinations.
After Vayudoot’s financial performance deteriorated, its assets were merged with erstwhile Indian Airlines (IA) in 1993. In 1997, Vayudoot’s flight operations were transferred to IA.
Aviation stocks soared on the bourses today following reports that the Union cabinet tomorrow might clear the proposal to allow foreign aviation firms to invest up to 49 per cent in domestic carriers.
Kingfisher Airlines was up 6.43 per cent, while Jet Airways gained 5.26 per cent and SpiceJet moved 5.45 per cent higher on the Bombay Stock Exchange today.