The civil aviation ministry’s agenda for the new government, includes abolition of minimum eligibility criteria for Indian carriers to fly international. The current norms allow Indian carriers to complete five years of domestic operations and have a fleet of 20 aircraft before they are allowed to fly international. This is, however, not the case globally. A senior ministry official said that they would want to abolish this norm. “We had tried to abolish under the earlier government too but that could not happen because of paucity of time. We will seek its abolition with the current government.” The proposal is likely to be discussed in the meeting with Prime Minister Narendra Modi scheduled for this week. The abolition is likely to benefit two new airlines — AirAsia India and Tata-SIA — who could fly international from the first day of launch.The ministry is also likely to seek permission to allow Air India to raise Rs 10,000 crore through tax -free bonds during the current fiscal and the immediate infusion of Rs 3,000 crore into the airline. In the event of shortfall in equity infusion promised by the government, this cash infusion will be used to repay loans that the airline had taken last year to clear outstanding dues to vendors. “Air India has been asking for permission to raise the amount through tax-free bonds and that demand will be reiterated in front of the new government too. The government in the past has not allowed the national carrier to raise through tax-free bonds,” said another official. “The cash infusion of Rs 3,000 crore is to repay loans we had raised last year due to shortfall in infusion of promised equity capital,” said an Air India executive. In October last year, the finance ministry had extended a sovereign guarantee to Air India to raise cheaper funds from banks. The approval enabled the airline to raise Rs 3,000 crore from financial institutions, as the government was not in a position to infuse the scheduled resources. For FY15, Air India is scheduled to receive equity infusion of Rs 5,500 crore from the government. Of this, the first tranche of Rs 1,375 crore has already been released to the carrier.
