India Friday unveiled a 40 billion rupee ($800 million) bailout package for cash-strapped flag carrier Air India as part of the federal government’s budget for the fiscal year beginning April 1. Although the cash infusion will provide relief to the state-run carrier, which has been struggling with high fuel prices and a large debt load, the package is smaller than the 55 billion rupees that had been expected.

Air India has failed to turn a profit since its merger with state-owned domestic operator Indian Airlines in 2007, and has amassed losses of about 181 billion rupees in the three years ended March 31, 2010.

The government has infused 32 billion rupees in equity in the ailing carrier in recent years to keep the carrier operating.

In its previous budget (2011-12), the government allocated 12 billion rupees for the flag carrier.

Separately, the new budget includes 2.8 billion rupees for the Airports Authority of India. About 805 million rupees of that sum has been earmarked for airport development in the northeastern states. The Directorate General of Civil Aviation was allocated 600 million rupees to pursue its plans.