Debt-ridden National Aviation Company of India (Nacil) that runs Air India and Indian Airlines

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has demanded a higher equity infusion of Rs 5,000 crore from the central government.

The national carrier will be submitting the draft note to the cabinet committee on economic affairs (CCEA) soon, says civil aviation minister.

“The government has agreed to put in equity into the airline, but has put conditions like reduction in expenditure and enhancement in revenues. So, now a note regarding equity infusion is being prepared, which will be submitted to the CCEA. The airline is looking to get Rs 5,000 crore from the central government,” Praful Patel, union minister for civil aviation, told reporters in Mumbai on Wednesday.

Earlier, the Nacil was looking for an equity infusion of Rs 1,350 crore and planned to raise Rs 3,650 crore through soft loan from banks and financial institutions.

“Any financial institutions will look at the balance sheet of an airline to lend money, nobody would give money to the company having huge debt,” Patel said.

The minister further said that the airline is also looking to restructure its debt with low interest rate from high interest debt. Nacil’s total debt is over

Rs 17,000 crore.

The public sector airline plans to reduce costs by over Rs 5,400 crore per year, including Rs 700 crore employee cost, savings from fuel, hiring, parking and landing charges and ground handling among others. While, it plans to increase revenues by Rs 2,400 crore per year through cargo, engineering, training and passenger revenue.

Meanwhile, the airline has also decided to differ the delivery of three of its Boeing 777 ER by couple of years. Nacil had placed order for six Boeing 777 ER aircraft, out which three are under construction and three were to be delivered this year. “But the management has decided to differ the delivery by around two years,” Arvind Jadhav, chairman and managing director, Nacil, said.

The airline will also be getting 6-7 independent directors on its board. “All the directors will be from the private sector, who have experience of running large companies,” Patel said.