14 July,2009 04:40 PM IST | | IANS
Loss-making national carrier Air India will not go for disinvestment at the moment to raise funds as market conditions were not favourable, said Civil Aviation Minister Praful Patel here on Tuesday.
"Markets are not favourable for an IPO (initial public offering) for Air India," Patel told the Rajya Sabha.
Instead, the minister said, the government was looking at providing soft loans to the cash-strapped carrier to help it come out of the financial crisis.
Air India has scrapped some unprofitable routes to check mounting losses, he said.
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"It has also taken measures to re-schedule aircraft deliveries and is returning leased planes at the earliest," Patel said during a discussion held to take a stock of the ailing carrier.
The carrier is in a financial mess with losses expected to have topped Rs 5,000 crore ($1 billion) last fiscal, forcing Patel to approach Prime Minister Manmohan Singh to seek a Rs 10,000 crore (about $2-billion) bailout package for the beleaguered carrier.
Last month, the carrier was also forced to delay the payment of salaries, besides asking senior executives to forego a month's pay.
The carrier is heading for a rejig and the government is now in the process of hiring people with proven track record to help in its turnaround.
Air India is also raising about $1billion loan from JP Morgan to fund its fleet expansion programme. The 11-year loan is guaranteed by the US Export-Import Bank.
