New Delhi approves Air India's turnaround plan

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India's government has approved turnaround and financial restructuring plans for flag carrier Air India and has re-emphasised that it expects the airline to show positive earnings this year.

Minister of state for civil aviation KC Venugopal told the upper house of India's parliament that the government would make its capital injections gradually "against achievement of specific milestones in terms of load factors, yield and on punctuality".

He adds that as a result of the two plans, the carrier "is likely to emerge EBITDA [earnings before interest, tax, depreciation and amortisation] positive in 2013".

The government says that it has invested Indian rupees (Rs) 100 billion ($1.84 billion) into Air India since 2009.

In the 2013-14 budget revealed in March this year, the government allocated Rs50 billion to Air India.

The cash-strapped carrier has been selling a number of assets, including property, over the last year to cover debts owed to trade creditors. It has also recently found a buyer for five of its Boeing 777-200LRs that have been on the market for several months.

Air India is also planning to complete the separation of its engineering and ground-handling units this year, which will help cut its headcount and costs.

Flightglobal Pro data show that Air India has a fleet of 94 aircraft in operation, with a further 24 on order, including 21 Boeing 787-8s and three 777-300ERs.