Air India (AI, Delhi International) will receive around INR30billion (USD490.3million) in additional funding from the Indian fiscus before year-end V Somasundaram, the permanent secretary of the Indian Ministry of Civil Aviation, has said.

Speaking to The Express newspaper, Somasundaram said the capital infusion, part of a larger INR60billion (USD980million) grant, would allow the loss-making carrier to continue operations while it undergoes restructuring.

"Air India has a turnaround plan under which a little over INR60billion has to be infused this year. I think more than half of that has been given already. Another around INR30billion will be infused by the end of the financial year," he said. "The problem was they (Air India) had lot of uneconomical routes and lot of loss-making operations. So during the last two to two-and-half years these have been reduced. They have been successful in bringing down the loss substantially. And by 2015 they are expecting to be profitable, that is next financial year."

The government has in the past three years given INR32billion to Air India and earlier this year approved an additional INR199.11billion infusion to be phased in over the next five years.

High fuel and interest costs, falling yields coupled with an enormous employee-aircraft ratio had caused the airline to post provisional operating losses of INR32billion in 2012-13, though this is now estimated to have fallen to INR22billion.

As part of its restructuring, Air India plans to reduce the number of non-performing routes in its network to 19% by the end of the current financial year having reduced the figure to 38% last year from 60% the year prior. In addition, it has also entered into a number of sale/lease-back deals with various banks to help offset the cost of its incoming B787-8 fleet.