Air India Seeks Financial Help From Government

The National Aviation Co. of India Ltd., which runs Air India, has asked the federal government for 39.81 billion rupees ($798.2 million) in financial assistance, Civil Aviation Minister Praful Patel said Thursday.

The owning company, Nacil, has "submitted a proposal for an equity induction of 12.31 billion rupees and a proposal for a soft loan of 27.50 billion rupees," Mr. Patel told Parliament.

The airline is seeking financial support to expand its 1.45 billion rupee equity capital base and fund operations. The company's aircraft acquisition program of Nacil is about 440 billion rupees, Mr. Patel added.

A senior Air India executive confirmed the airline's request. "However, it must be noted that we have asked the government for financial support because the government is the owner of the airline and only an owner can take a final call on financial support and enhancement of equity," Jitendra Bhargava, Air India's executive director for corporate communications told Dow Jones Newswires.

Separately, Mr. Patel told Dow Jones Newswires on the sidelines of the inauguration of the new departure terminal at New Delhi's Indira Gandhi International Airport that a committee of secretaries will meet soon to consider Air India's proposal.

Write to Nitin Luthra at nitin.luthra@dowjones.com