More funds sought for ailing Air India

New Delhi: The Civil Aviation Ministry on Tuesday sought more budgetary support for Air India claiming that almost 65 per cent of the turnaround plan of the ailing national carrier has been implemented.

The issue of additional support was raised by Civil Aviation Minister Vayalar Ravi at a meeting here with Finance Minister Pranab Mukherjee, during which the two leaders discussed issues pertaining to the aviation sector in the upcoming Budget.

"We informed him that whatever decision had been taken, we have implemented almost 65 per cent of it and something more is to be implemented," Ravi told reporters after the hour-long meeting.

Regarding government guarantees on the hefty loans Air India has taken to fund its fleet acquisition, he said, "The guarantee has to come …. because the RBI, the SBI need some kind of assurance. All financial matters were discussed."

He said certain clarifications had been sought by Finance Ministry officials. The replies would be sent soon so that a final decision on the matter could be taken at the earliest.

Asked whether the Ministry has asked for additional equity infusion of Rs 2,000 crore, he said, "I have asked for little more money, I cannot tell you how much."

To further queries, he said the estimated amount had been given by Deloitte, the consultancy firm appointed by Air India to go into its turnaround plan. "We want more money if we can get more."

Asked about Mukherjee`s response, Ravi said the government would help Air India but it would come "depending on how we are progressing step by step. So it means we have to earn more money and gradually reach the break-even point."

Air India has so far received a total of Rs 2,000 crore as equity in two tranches and earlier reports said the Civil Aviation Ministry has sought another Rs 2,000 crore in the next financial year.

Official sources said a provision for at least Rs 1,200 crore worth of equity could be made in the 2011-12 budget and another tranche could be given in the supplementary budget later this year.

Asked about the remaining priorities of Air India`s turnaround plan, Ravi said a major issue was that of integration of employees and assets of the two erstwhile public sector carriers — Indian Airlines and Air India.

"I said give me some time. My first priority is my employees. Integration is the main point. Routes also. I am going to look into pricing of tickets also," the Minister said.

He said the headquarters of Air India Express would also be shifted "because that is a major area… we are confident that we can make good profit from Air India Express. One by one only I can do."

On the recent sacking of AI Express COO Pawan Arora and Air India`s HR Policy, Ravi said, "It is serious business…

The (AI) Board is there, its decisions are there. There are independent directors (on the Board). They are eminent people and if they advise me to do something, I will do it."

The Minister said he would hold meetings with leaders of all trade unions in Air India in Mumbai tomorrow to seek their cooperation to turnaround the carrier. The airline has 32,000 employees on its rolls and another 10,000 on contract.

Himself a trade union leader, Ravi will camp in Mumbai for two days and hold discussions with the management on the feedback he gets from the unions.

"The basic aim will be to know their mind on the issues and to what extent they can cooperate to take Air India forward," Ravi said, acknowledging that the employees "may have grievances".