Welcoming the Indian government’s move to infuse equity in Air India, the IATA today said such support should be a “one—time shot” that should be followed up by an effective restructuring programme to ensure that the airline comes out of red.
“The airline industry as also Air India is down as a business. We normally do not support bailouts. But giving funds to meet an emergency situation is alright. However, it should be a one—time option,” International Air Transport Association (IATA) Director General and CEO Giovanni Bisignani, told PTI in an interview here.
The government has recently decided to infuse equity worth Rs 800 crores in the first tranche into Air India, which has a paid—up equity base of just Rs. 145 crores but has ordered aircraft worth Rs. 40,000 crores.
The chief of the Geneva—based IATA said that the airline, as a follow-up, should work on a “strong, effective restructuring programme so that it is able to run on its own leg.”
“Once the market has been opened up, you have to give the national carrier a chance to compete. In some cases it is okay to give money in an emergency situation especially if it is linked to major restructuring as is happening in Air India,” Mr. Bisignani said.