India's government has agreed to provide Air India with up to 50 billion Indian rupees ($1.1 billion), conditional on the ailing carrier cutting costs and boosting revenues.
"The government has demonstrated its sincerity and agreed to an equity infusion of 50 billion rupees," India's civil aviation minster Praful Patel told reporters in Mumbai.
But he says he wants Air India over the next two years to cut costs by 30 billion rupees and raise revenue by 20 billion rupees.
"Stronger marketing efforts need to be done to attract more customers," he adds.
On 28 September Air India said it aims to achieve cost savings of 13 billion Indian rupees ($272 million) in the remaining six months of its fiscal year.
India's flag carrier said it is targeting cost savings in a number of areas. From its operational restructuring alone Air India hopes to achieve cost savings of four billion Indian rupees, it added.
Air India made a loss of around 50 billion Indian rupees for the fiscal year to 31 March.