Govt to infuse equity into Air India with strings attached

The Group of Ministers (GoM) met for the second time to discuss the restructuring for Air India. After a two-hour long meeting, the government has asked Air India to tighten its belt further. The government has also said that it will be monitoring Air India's restructuring on a monthly basis, reports CNBC-TV18's Mehak Kasbekar.

"We are talking of an equity infusion. We are broadly looking at an equity infusion linked to monthly performance parameters. We are only looking at it till March," said Civil Aviation Minister Praful Patel, emerging from the meeting. "This is not the total equity infusion which is being looked at for Air India. We are also going to see how it performs on a monthly basis to be able to finally take a call at the end of March as to what will be the final support which the government will provide."

The minister thus made it clear after the two-hour long GoM meet that the government is looking at only equity infusion into Air India. There is no other kind of help that is being looked into at this point in time. The Aviation Minister was clear when he stated that the government had decided on certain parameters - he did not elaborate exactly what - that Air India will have to adhere to till March, which will be reviewed on a monthly basis.

Also an interim plan has been put in place that till March a certain amount of equity infusion will have happen into Air India. However, what this amount will be has not been decided yet or has not been told yet.

Patel also said that the Air India will have to save in revenue and cost cutting atleast Rs 2,000 crore till March. That is the deadline for Air India.

If the government shows a positive trend till March, only then will the government look at any further help. But we can look towards a certain amount of equity infusion definitely before March.