Air India (AI, Delhi International) has received a INR9.8 billion rupee (USD138.3 million) capital infusion from the central Indian government, The Economic Times has reported. The bailout package will allow the carrier to avoid defaulting on its debt within the next few weeks.

More than a half of the bailout, INR5.5 billion rupee (USD77.6 million) will be used to repay the interest on nonconvertible debentures (NCDs) due by the end of September. The NCDs were earlier issued by Air India as part of a turnaround plan.

The Indian flag carrier said earlier that it would need at least a INR5 billion rupee (USD70.6 million) capital injection from the government or else would start defaulting on its debts.

"The rest of the money will be used to pay for spares for our planes, which are currently on the ground and will soon be flying. We will also be paying our international and other vendors," an unnamed senior official at Air India said.

The carrier has already started spending the newly injected funds.

The injection comes on top of a INR15 billion rupee (USD211.8 million) government guaranteed loan the carrier received in August from Bank of Baroda.

In 2013, the then government of India approved a INR302.3 billion rupee (USD4.3 billion) aid package to the carrier, valid through 2022. Of this amount, Air India has already received INR297.3 billion rupees (USD4.2 billion), or 98%, including the most recent capital injection.