He said more investments with strict riders have been planned to revive the ailing national carrier.
According to the plan, Air India would be allowed to induct more aircraft to grow its market share, while a search-cum-selection committee will scout for the best management talent for the company.
The airline group with a consolidated debt...
level of around Rs 55,000 crore will also be required to sell non-core assets, and adhere to a Rs 2,000 crore cost saving plan.
Prabhu said the financially challenged airline will induct three aircraft on a dry-lease within the next two months.
"Air India placed order for induction of 27 A320 NEO on dry lease basis. Out of 27, 24 have already been inducted and remaining 3 will be inducted within next two months," the minister told IANS.
In 2018, the company failed to find any suitors during the last and the only attempt by the government to divest its stake in the airline business.
"Government has prepared a 'Revival Plan' of Air India... which includes a comprehensive financial package, transferring non-core debt and assets to an SPV (special purpose vehicle)," Prabhu told IANS.
"We have also proposed to induct eminent persons on the board of Air India through ‘Search-cum-Selection Committee' process."
Last month, the Union Cabinet approved creation of an SPV -- Air India Assets Holding Ltd -- for transferring the accumulated working capital loans of the national carrier.
It has also approved the associated activities for the disinvestment of Air India and its subsidiaries or joint ventures.
Accordingly, Rs 29,000 crore debt of Air India along with four of its subsidiaries will be transferred to the SPV. Non-core assets like paintings and artefacts and other non-operational assets will also be transferred to the SPV.
The move assumes significance as it will lessen the interest payment obligation of the airline.
The Centre has also invited "Expression of Interest" for strategic divestment of the carrier's ground handling subsidiary Air India Air Transport Services Ltd (AIATSL) which has been transfeered to the SPV.
The disinvestment proceeds from the sale will be used to pay off the debt incurred by the SPV.
The proposed strategic stake sale of debt-laden Air India failed to take off in May last year and the government is now working on ways to revive the fortunes of the airline. As per the disinvestment plan, which did not elicit any preliminary bids, the government had proposed to offload 76 per cent equity share capital of the national carrier as well as transfer the management control to private players.
A Turnaround Plan (TAP) as well as a Financial Restructuring Plan (FRP) were approved for Air India by the previous UPA regime in 2012.
Under these plans, the airline is to get budgetary support amounting to Rs. 30,231 crore over a ten-year period and also equity support for the payment of principal/ interest of the non-convertible debentures.