The government is set to infuse Rs 980 crore as equity in Air India next week after the airline said it does not have the funds to service debt, The Economic Times reported.

About Rs 550 crore of the total capital infusion is likely to be used to service interest on nonconvertible debentures (NCDs) that are due next month, the report said citing an unnamed senior Air India official.

The airline had earlier issued government-guaranteed worth Rs 7,400 crore to repay bank loans.

The capital infusion, according to the report, is part of the Rs 30,231 crore turnaround plan, which was approved in January 2013.