Govt approves turnaround plan for Air India

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In a big boost to ailing Air India, the government on Thursday approved a turnaround plan (TAP) to restructure the operations and the finances of the cash-strapped carrier, including infusion of additional equity.

"The turnaround plan of Air India has been approved," Civil Aviation Minister Ajit Singh told reporters after a meeting of the Cabinet Committee on Economic Affairs (CCEA).

The CCEA approved the TAP and the airline's financial restructuring plan (FRP), which includes additional equity infusion by the government.

Besides, the issue of induction of the much-awaited Boeing Dreamliner-787, part of the TAP, was also given the green signal by the CCEA, official sources said.

They said the issue of allowing foreign airlines to invest in Indian carriers could be taken up by the Cabinet next week.

As part of the airline's restructuring plans, the government had announced infusion of Rs 4,000 crore during the current fiscal in the 2012-13 Union Budget.

This would raise the airlines' equity base to Rs 7,345 crore. US aircraft manufacturer Boeing is expected to deliver the first of the 27 Dreamliners, ordered in 2005, to the national carrier next month.

The delivery of these aircraft was initailly to commence from 2009 but the US aircraft-maker deferred it for various reasons, including labour unrest.

The SBI-led consortium of 19 banks had last month approved the FRP which includes debt restructuring of Rs 18,000 crore by the banks and a committed equity infusion by the government.