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The government should occasionally grant thousands of crores of rupees to Air India for its functioning as withdrawal of flights from profitable routes and unresolved issues relating to its merger do not augur well for the carrier, a parliamentary committee has said.

The Standing Committee on Transport, Tourism and Culture "recommends that the government should differentiate between private airlines and Air India as a public sector undertaking supported by the government occasionally by granting thousands of crores of rupees for its functioning".

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In a report on the Demands for Grants of the Civil Aviation Ministry tabled in Parliament on Friday, the Committee, headed by CPI (M) leader Sitaram Yechury, said "the withdrawal of services from profitable routes is not going to augur well for the growth of Air India".

The rationale given by the government "for granting more and more bilateral to private sector is not convincing, especially when the Air India flights are operating with low capacity and making losses on international routes".

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The Ministry had told the Committee that the utilisation of the bilateral air traffic rights were "available to the designated airlines of India" and should not be the responsibility of Air India alone.

In the backdrop of steep rise in jet fuel prices and financial difficulties faced by the Indian airlines, "the government has been adopting calibrated approach towards granting further bilateral traffic rights", it had said.

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The Committee further said Air India can bring back its lost glory only if the "basic issues" relating to the merger of Air India and Indian Airlines were sorted out.

The Committee said that only by adopting prudent busines practices, Air India could "face the onslaught of the private low-cost carriers".

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On Airports Authority of India, it said the state-run airports body should give priority to develop and upgrade the airports in Northeastern region "as air connectivity to this region, with immense tourism potential, can hardly be further delayed".