Govt to infuse Rs1,100-1,500-cr fresh capital into Air India: Praful Patel

Hyderabad: Civil aviation minister Praful Patel said here Wednesday that the Government will infuse Rs1,000-1,500 crore into flag carrier Air India as capital along with additional working capital of Rs100 crore in an effort to bolster its finances.

"There is need to infuse further liquidity to make Air India a viable entity," Patel said. He was in Hyderabad to inaugurate the first India-2008 international civil aviation display and conference.

"It is owned by the Government," Patel said of Air India, " and as like any owner of a company, the government should be ready to infuse liquidity into it. Air India has a very small liquidity base of Rs 145 crore and with an estimated aircraft value of Rs40,000 crore it is absolutely unacceptable," he said.

When queried about plans for an Air India IPO, Patel said so far there were no discussions about public listing and so there was "no point in talking about that at this juncture."

As for putting into place a market and price regulator for the civil aviation sector, Patel admitted that issues currently plaguing the aviation industry in India could best be resolved by such a regulator. "It will take time as some airlines want it and others don't want it and we need to thrash out all issues," he said.

Earlier in the day, Jet Airways chairman Naresh Goyal had said that India needed an aviation market regulator.

Patel informed the media that an Airport Regulatory Authority Bill has already been prepared and would be tabled in parliament soon.

As for the freshly announced operational alliance between Jet Airways and Kingfisher, Patel said the Government wouldn't oppose the tie-up. "Cooperation between two major airlines should be within rules and regulations," he said.