Government would infuse additional equity

of Rs 1,200 crore into Air India over the next

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few months and review

its performance to decide on the future course, Civil Aviation Minister

Praful Patel has said.

He, however, said there was no decision to divest government

equity in the cash-strapped national carrier "at the moment".

"It is imperative that we assess the situation after (a total

of) Rs 2,000 crore is infused as equity. Rs 1,200 crore will be given

in the next few months," Patel told PTI in an interview on the sidelines

of the annual summit of the International Air Transport Association

(IATA) here.

Government, as Air India's owner, last year gave the airline

Rs 800 crore as equity.

Asked whether government was mulling divesting its stake

in the ailing carrier, he said "at the moment, the decision is not

to disinvest and we stand by the policy of the government. Government's

decision is to have a national carrier and it shall continue to be so."

On whether government would consider a "course correction"

regarding the merger of Air India and erstwhile Indian Airlines following

criticism from several quarters, Patel said "no, nothing of the sort.

We have to make sure that it works well. We have to see how it performs

(after the equity infusion). There has been no government subsidy

to Air India".

He said officials of all airlines attending the IATA Summit

have opined that "mergers do not happen overnight. It is an ongoing

process which has to be achieved over time. Air France-KLM have taken

six years. Nobody has said merger is a one-day process."

As costs increase and the airlines' margins came under pressure,

consolidation was "inevitable and nothing unusual".

On Air India's financial troubles, he said there were several

options before the government to help the airline come out of it

-- to allow the airline to go to the market, to go for an IPO (Initial

Public Offer) or give it equity support. "In this case, government

chose the third option".

However, the Minister asserted "the worst is over for all

(Indian) airlines, including Air India".

On strengthening of the Directorate General of Civil Aviation

(DGCA), Patel said government was considering granting it full autonomy

and support the regulator in its functioning.

"We need to institutionalise this total autonomy" the government

would like to give it, the Minister said, when asked whether a legislation

would be brought for the purpose in Parliament.