Govt working on new plan for Air India

The government is working on a new turnaround plan for Air India Ltd (AI) and to permit domestic airlines to raise external commercial borrowings for working capital purposes, civil aviation secretary RN Choubey said on Thursday.

The plan will include infusing capital, adding new planes and more operational autonomy for Air India’s board, considered a key hurdle for the state-run carrier in competing with private players.

“We would like to make sure that Air India as a state-owned enterprise remains competitive and its market share does not go down, which may require capacity induction,” Choubey said. “We will also ensure that sufficient delegation (of power) is given to the board of directors to decide on operational matters,” Choubey said.

He declined to give details on the extent of capital infusion. “Discussions are going on with the finance ministry,” he said. Making AI competitive to survive on its own has become an imperative as the government cannot indefinitely spend taxpayer funds to run the carrier when it requires financial resources for massive welfare plans such as health insurance for the poor and support price for winter crops announced in this year’s federal budget.

Mint reported on Wednesday that federal policy think tank NITI Aayog favoured turning around the carrier before it is privatised so that the asset fetches better value.

Air India recently failed to attract investor interest when the government put it up for privatisation .

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