New Delhi: It looks that Air India’s rising losses haven’t discouraged the government from thinking over a public issue for the state carrier.

Praful Patel, the civil aviation minister said that the administration could disinvest between 10-15% equity in the carrier by the second half of the coming year (2008).

“We are keen to broad base the ownership of Air India and an IPO with 10-15% equity dilution will help us do that. Even employee stock options would be considered,” the minister said.

Patel’s remarks come just when Air India has sought a Rs 1,000 crore assistance from the administration.

If the administration agrees to help the State carrier, the funds would be utilized for increasing AI’s equity base.

While acknowledging that the carrier has sought relief, Mr. Patel said, “They need more capital infusion because asset acquisition (AI is faced with chronic fleet shortage and has to place large aircraft buy orders soon) needs more equity.”

Air India recorded a net loss of Rs 448 crore for 2006-07. And even in the existing year, AI is likely to announce a net loss of about Rs 350 crore.

While stating his uneasiness at the growing Aviation Turbine Fuel (ATF) costs, Patel again urged the petroleum ministry plus the state governments to consider reducing sales tax “meaningfully”.