NEW DELHI (Reuters) – Discussions on a bailout package for embattled state-run carrier Air India are at an “advanced stage”, the country’s junior aviation minister Jayant Sinha said on Wednesday.
FILE PHOTO: Jayant Sinha gestures during an interview with Reuters in New Delhi, India, April 27, 2015. REUTERS/Anindito Mukherjee
India’s government has been working on a package for Air India after plans to sell a majority stake in the debt-laden airline failed this year due to a lack of interest from bidders.
“We are going through the government approval process,” Sinha told reporters, without giving details.
Air India, which has survived for years with help from taxpayers, has asked the government for 21.21 billion rupees ($292 million) in additional equity to pay the carrier’s bills to vendors.
India’s top civil aviation bureaucrat said in September that a $120 million capital injection for Air India was on the way, and the government is also working on a relief package for the airline industry.
Jet Airways, India’s largest full-service carrier, and state-owned Air India are struggling to stem losses in the world’s fastest-growing domestic aviation market, where competition is intense and fuel taxes are high.
India’s airline industry is forecast to lose up to $1.9 billion this financial year due to rising costs and low fares, according to consulting firm CAPA.
The civil aviation ministry has proposed other measures to help the airline industry, including adding aviation turbine fuel to a nationwide goods and services tax, Sinha said.
($1 = 72.7125 Indian rupees)
Reporting by Manoj Kumar, Writing by Aditi Shah, Editing by Sherry Jacob-Phillips and Darren Schuettler