AI can avoid Rs18,000 crore worth of liabilities: Praful Patel
13 September 2011
Responding to criticism from the auditor's office of the Comptroller and Auditor General of India (CAG) former civil aviation minister, Praful Patel, has pointed out that the auditor's office may have omitted to highlight a significant fact in its report, that Air India has neither paid for Rs18,000 crore worth of aircraft orders from Boeing nor received delivery and so can easily get rid of this significant financial burden.
Patel was speaking to a business news channel.
Clarifying his criticism of CAG that its report was wisdom in hindsight, Patel said at the time he took the decisions regarding purchase of new aircraft to replace an ageing Air India fleet, both the carrier's Air India and Indian Airlines were in bad shape. ''They both were in negative net worth in 2004-05'', he said.
Responding to a frequently levelled criticism that he opened up routes for foreign airlines Patel said, ''Skies had been opened up domestically and internationally much before I became civil aviation minister.''
It was in this backdrop that the decision to buy planes was taken and that ''…20 years plus old aircrafts were sought to be replaced by 111 aircrafts over a period of seven to eight years which meant that even if you consider a 4-5% growth annually that also was not enough to see the airline replacing existing capacity.''
As for the CAG's pungent observation that the aviation ministry seriously miscalculated ''that increase in capacity share would automatically lead to a substantial increase in Air India's market share'' Patel responded sharply by saying that today ''…Rs18,000 crore worth of planes have neither been paid for neither have they been delivered. So how does the CAG come to the conclusion that too many planes have caused Air India's financial health to be where it is?''