The cabinet approved on Thursday an equity infusion of Rs 12 billion into ailing state-run carrier Air India, a government statement said, giving a new lease of life to an airline that has not posted a profit since 2007.

Air India has estimated losses of Rs 69.94 billion in the year to March 2011, and is in talks with banks to restructure $4 billion of working capital debt.

It is also in the midst of implementing a turnaround plan which would focus on a hub-and-spoke route model, cut costs by redeploying staff and offload non-core real estate.

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