Govt to help ailing Maharaja: An analysis

Civil Aviation Minister Praful Patel, who met Prime Minister Manmohan Singh to discuss Air India's finances, said that the government would support Air India conditionally, based on how the company shapes up, CNBC-TV18's Swati Khandelwal reports. The new Air India could be quite linear and thinner from what it was, clearly hinting at some amount of layoffs that we can look forward to.

Also Read: Govt to support Air India conditionally: Praful Patel

Here is a verbatim transcript of Swati Khandelwal's comments on CNBC-TV18. Also watch the accompanying video.

Just to recap and reiterate what the Civil Aviation Minister told us a few moments ago. He said that the Prime Minister, of course, has assured all support to Air India. He also reiterated that there will be an overall restructuring that could come up. In fact, the new Air India could be quite linear and thinner from what it was, clearly hinting at some amount of layoffs that we can look forward to.

He also said that the Union should actually be supportive here and look that the company is actually in trouble at this point in time. He also said that for now, the company will be given whatever financial aid they require, but Air India needs to come up with the concrete restructuring plan, which is yet to be submitted to the government. And hence, they will take a view on how much do they need money in the form of equity or loans going forward.

There has been no proposal yet made from the Air India management except that today the secretary and the CMD for Air India both gave presentations in front of the Prime Minister and spoke about financial help-in fact, opened the financial report card in front of the Prime Minister. Praful Patel also said that Secretaries Panel will review Air India's operations and they will have to go for massive cost cutting and restructuring.

We also understand from sources that Air India is now perhaps contemplating maybe a low-cost carrier instead of a full-service carrier. We understand that currently, Air India Express, which is the only International low-cost carrier, can probably be extended to being a domestic low cost carrier as well.

A lot of business for Air India has been outsourced. However, people have not been removed. Thus the question arises-what should be done with that extra staff.

We understand from sources that tomorrow the Air India's Chairman and Managing Director Arvind Jadhav is expected to meet all four groups of the Union and talk to them about it.