INDIA: Air India seeks government hand-out

The Indian government has requested Air India to provide the details as to why it is seeking a nearly US$240 million government capital infusion as it faces growing domestic competition, record high fuel prices and an ambitious fleet expansion plan. The carrier’s new chairman and managing director, Raghu Menon, recently announced he would seek a […]


The Indian government has requested Air India to provide the details as to why it is seeking a nearly US$240 million government capital infusion as it faces growing domestic competition, record high fuel prices and an ambitious fleet expansion plan.

The carrier’s new chairman and managing director, Raghu Menon, recently announced he would seek a cash injection from the government to help improve the financial health of the airline as it slides ever further into debt due to its fleet expansion programme of which it has so-far received 31 of 111 aircraft currently on order.

The carrier has raised some cash from asset sales, completing a US$320 million sale-and-lease back agreement for three B747s and five A320s in late March.

The deal will help moderate the carrier’s losses for FY07/08, which analysts expect to be well above the US$175 million loss recorded in FY06/07.