AI woes reach cabinet secy,rescue options weighed

With an empty treasure chest,the wobbly existence of the Rs 15,000-crore Maharaja or the National Aviation Company of India Nacil....

With an empty treasure chest,the wobbly existence of the Rs 15,000-crore Maharaja or the National Aviation Company of India Nacil has drawn the attention of the cabinet secretary,who weighed alternatives to save the national carrier. The airline may get relief in the form of extra budgetary support,via a supplementary grant or revised budget estimates,an official said.

Concerned over recent media reports regarding the deferment of salaries and the general cash crunch,the civil aviation ministry held a marathon session with cabinet secretary K M Chandrasekhar to discuss the problems that blight Nacil. The meeting discussed several options to bail the carrier out of its current crisis,a senior government official told The Indian Express. Todays meeting is the first of many expected to take place over the next few days until a viable option is found. Ministry officials will meet the principal secretary to the Prime Minister,T K A Nair,on Wednesday for further discussions.

The meeting was a brainstorming session,where the size and nature of assistance to the carrier were discussed. All possible alternative scenarios for the carrier were also discussed, the official said. However,the official refused to elaborate on the alternatives to secure the airlines future. Civil aviation minister Praful Patel,who led the merger of the erstwhile Air India and Indian Airlines in his previous term,had earlier remarked that the carrier may raise funds by bringing an IPO in 2010.

While Nacil is yet to submit a final financial proposal,as it is holding widespread discussions with the government,the official admitted that time may have run out to accommodate the carriers concerns in the forthcoming budget. It may be difficult to address Air Indias demands in the Budget 2009-10,however,the carrier may get relief through extra budgetary support, the official said. The carriers wishlist a set of initial estimates which were discussed with the ministry earlier had included a grant of Rs 2,000 crore,along with an equity infusion of almost Rs 5,000 crore and Rs 7,000 crore as a soft loan.

Meanwhile,newly appointed Air India CMD Arvind Jadhav wrote in a letter to the companys employees around 150 of whom have been asked to voluntarily forgo their salaries for July that they need to rise to the challenge. the time has come for us to face the moment of truth in Air India as well8230; Jadhav wrote. He further said that loans from financial institutions at high rates of interest cannot be availed of endlessly to meet working capital expenditure.