Ailing national carrier Air India has urged the government to pay off the $270 million owed to the airline for ferrying top-level dignitaries and for emergency evacuations.
Aviation ministry officials met Tuesday to discuss the airline's proposal for recovering money worth 12.2 billion rupees, which would help the flagship carrier pay its staff and pay interest on loans, a company source told AFP.
The source said eight billion rupees was to transport dignitaries including government ministers and officials, while the remainder was for emergency evacuations of Indian nationals from crisis-hit Libya and Yemen.
"Work-in-progress is taking place fast. We are hopeful of a solution soon," the source said.
"The government is concerned. It is sensitive to Air India's needs," the source added, describing the airline's current financial position as "grave".
India's government has said it attached huge importance to reviving the carrier and Prime Minister Manmohan Singh has asked Finance Minister Pranab Mukherjee to take "expeditious decisions" to help Air India revamp operations.
This was after media reports last week raised concerns that the airline may see operations grind to a halt as it is struggles to keep up interest payments on its substantial debt burden.
The Hindustan Times last week said Air India had failed to pay service tax and interest on its debts since March 31 and its creditors might freeze its accounts or other assets against which loans were secured.
Air India is waiting for approval of a five-year turnaround plan, including a government cash injection and a new business plan that would increase its fleet size, cut routes and set up network hubs.
The government pumped about eight billion rupees into the airline in the financial year 2009-10 and expects to put in another 12 billion this year on condition the company cuts costs.
The restructuring plan is currently under review.
Private airlines such as Jet Airways, Kingfisher and low-cost rivals like Indigo and SpiceJet have replaced Air India as a preferred airline in recent years.
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