The airline will use internal resources and borrowings, even as the government promised to infuse additional equity worth Rs. 1,200 crore during the 2010-2011 period.

Air India will have to raise about Rs. 4,435 crore through its internal resources and borrowings in 2010-11 to finance its fleet acquisition, even as the government promised to infuse additional equity worth Rs. 1,200 crore during the period.

The ailing national carrier is expected to induct four Boeing 777-300 (Extended Range) and one Airbus A-321 during this financial year. With the arrival of the A-321, Air India would complete its order of 42 aircraft from the European manufacturer Airbus, official sources said.

Out of a total annual plan of Rs. 5,634.80 crore, the airline would get equity worth Rs. 1,200 crore with the remaining amount to be mobilised through internal and extra-budgetary resources (IEBR). Government had infused equity worth Rs. 800 crore in the last fiscal.

Air India is projected to spend Rs. 4,197.80 crore on the aircraft acquisition programme, including advance and delivery payments to the manufacturers, creating supporting infrastructure for the new aircraft and interest, they said.

It is also likely to incur other capital expenditure on items like building projects, computerisation and booking offices and has earmarked Rs. 237 crore for the purpose.

In 2009-10, the airline had inducted a total of 27 aircraft into its fleet, which are meant primarily to replace leased and old aircraft. This includes nine A-319s, four A-320s, seven A321s, three B-777-200 LRs and four B-777-300 ERs.

Expressing hope that Air India would be able to expand its domestic and global route network with the new aircraft, a parliamentary committee has asked the government to grant the airline more autonomy and “not impose its decisions” on it.

The Standing Committee on Transport, Tourism and Culture, headed by CPI(M) leader Sitaram Yechury, has also asked the state-owned air carrier to “put its act together as early as possible” to reclaim its ‘Maharaja’ status.

It also wanted all merger related issues to be settled by the government in accordance with its recommendation that two separate airlines for domestic and international services be created to function under one holding company, NACIL.

An identical recommendation to have two airlines under NACIL was later made by the Committee on Public Undertakings headed by Congress member V. Kishore Chandra Deo.

The Yechury panel has pointed out that Air India Express, the airline’s no-frill carrier, had “not come up to expected levels” in the low-cost market and felt that it should take “giant steps” to gain more market share.

It asked the airline to take some “aggressive” marketing and promotional strategies to strengthen its presence in domestic and international markets.

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