Air India Board approves proposal to reduce business class seats

The move would help the carrier generate extra revenues by increasing economy loads and at the same time maximise business class returns,the source added. In a nearly five-hour meeting,the Board also deliberated upon its financial restructuring plan,and decided to rent out prime properties located at metros to enhance revenues. Ahead of the government plans to extend nearly a Rs 10,000 crore bailout to the carrier,which includes Rs 6,600 crore worth of equity infusion,the airline reviewed the progress of its turnaround plan. The Union Cabinet is expected to consider this package shortly to enable inclusion of the provision in the Budget,official sources said.

Official figures show that the debt-ridden carrier has outstanding loans and dues worth Rs 67,520 crore,of which Rs 21,200 crore is working capital loan,Rs 22,000 crore is long-term loan on fleet acquisition,Rs 4,600 crore is vendor  dues. It has an accumulated loss of Rs 20,320 crore. 

Banks and financial institutions had proposed several measures to beef up Air India’s net worth and these were among the proposals approved by a Group of Ministers,the sources said.

Air India’s debt restructuring plan had hit a hurdle after banks had refused to convert a part of the short-term debt into equity.