IMG nod to Rs 1,200 crore equity infusion in Air India

The Inter Ministerial Group (IMG) formed to look into financial woes of flagship carrier,Air India,gave its in-principle approval for Rs 1,200 crore equity infusion and an immediate payment of Rs 532 crore for VVIP operations and evacuation flights.

The group,led by Finance Minister Pranab Mukherjee,asked other ministries to send their views on two separate draft proposals circulated by the Civil Aviation Ministry on equity infusion and operationalisation of a ground handling unit and a maintenance,repair and overhaul unit. The Finance Ministry is yet to respond to these proposals,a senior official said. It also asked the specially formed Group of Officers led by special secretary (expenditure) Vilasini Ramachandran to make their recommendations within six weeks on Air India’s financial restructuring plan.

Civil Aviation Minister Vayalar Ravi said that the group will meet again next week. The final amount cleared by the group has been slashed by almost half as Air India had raised a total bill of around Rs 800 crore for VVIP operations that included maintenance of three Boeing 747 aircraft and flight crew salaries. The Finance Ministry disagreed with some of the fixed cost components. It had given its nod for Rs 336 crore per annum towards maintenance costs of aircraft deployed for VVIP flying, said another ministry official. The group cleared Rs 100 crore towards evacuation operations carried out by the airline in Libya and Egypt.