Air India is going all out to get equity infusion from the government. Sources say the airline company has asked for an immediate release of the promised Rs 1,200 crore into the airline as it has pending fuel dues worth Rs 2,400 crore.

Research Said that Air India is indeed calling for an immediate release for about Rs 1,200 crore as equity infusion which was promised by the Finance Minister in this budget. We understand that this money will essentially be used to part pay the fuel dues which are over Rs 2,400 crore.

The company is seeking discounts from the oil marketing companies. However, the oil marketing companies are looking for a hike of about Rs 5 crore per day due to rise in input costs. Currently, Air India is paying about Rs 13.5 crore for jet fuel. The credit facility was withdrawn from Air India in December 2010 and since then they have been getting the fuel on cash and carry basis.

Research also tell us that Air India is seeking another an additional Rs 17,500 crore of equity from the government going forward. They have a debt of over Rs 40,000 crore. Sources indicate that in this financial year they are expected to post losses to the tune of Rs 7,000 crore. So, the company is really looking forward for the equity infusion that was promised by the Finance Minister of about Rs 1,200 crore as soon as they can get.