The Government has approved financial bailout package for revival of Air India. In view of the huge losses suffered by Air India (a Government of India enterprise) for the year 2007-08 to 2010-11, and its mounting debt burden, the Government decided to formulate a Turn Around Plan and a Financial Restructuring Plan to improve the operational and financial performance of Air India. The Government approved Air India’s Turn Around plan (TPA) and Financial Restructuring Plan (FRP) on 12.4.2012 that provided for infusion of additional equity by the Government cost reduction and improved operational performance. The financial support approved under the TAP from the Government is as under:

i) Induction of upfront equity of ₹ 6,750 crore;

ii) Equity for cash deficit support of ₹ 4,552 crore from Financial Year 2012-13 till Financial Year 2017-18;

iii) Equity for already guaranteed aircraft loan of ₹ 18,929 crore till Financial year 2012;

iv) Government of India guarantee for repayment of principal amount and payment of interest on the Non Convertible Debenture (NCDs) of ₹ 7,400 crore proposed to be issued by Air India to Financial Institutions, Banks, LIC and EPFO.

This information was given by the Union Minister of Finance, Shri Arun Jaitley in written reply to a question in Lok Sabha today.

Government guarantee for proposed debentures underpins a state-backed rescue combining equity infusion and deficit support. The Government approved a financial package under a Turn Around Plan and Financial Restructuring Plan for Air India, comprising upfront equity infusion, equity to cover projected cash deficits, equity for already guaranteed aircraft loans, and a government guarantee for repayment and interest on proposed Non-Convertible Debentures issued to financial institutions and specified public investors.