The government will consider the issue of infusing equity into ailing Air India shortly, Civil Aviation Minister Praful Patel said on Thursday.
"The government is committed to equity infusion (in Air India) for which we are moving the Cabinet very shortly. The government is also committed to reduce the high cost debt (of Air India) to low cost debt with the assistance from banks," Patel said.
Air India is currently saddled with a debt of Rs 16,000 crore (Rs 160 billion) on an equity base of Rs 145 crore (Rs 1.45 billion). It has been demanding a bailout package from the government, consisting of equity infusion and a soft loan.
It has accumulated losses of over Rs 7,200 crore (Rs 72 billion) up till March 31, 2009.
Patel also said the ministerial committee, constituted to look into the issue of reduction of sales tax on aviation turbine fuel, will meet soon to decide on the matter.
Airlines have been demanding reduction of sales tax on jet fuel to 4 per cent from an average of 26 per cent at present.
