Air India will continue to bleed in years to come: Patel
10 March 2010
New Delhi: Flag carrier, Air India, is likely to report losses of around Rs5,400 crore ($1.8 billion) this fiscal and the trend is likely to continue for a few more years, civil aviation minister Praful Patel said Tuesday.
"The trend of losses is likely to continue for a few more years," the minister informed the Rajya Sabha. He did not clarify when the airline would return to profits.
The state-owned carrier is run by holding company, the National Aviation Co. of India Ltd (NACIL), formed after the merger of domestic carrier, Indian Airlines, with international service provider, Air India.
If losses turn out to be as the minister has announced then the carrier's overall losses will accumulate to around Rs13,174 crore ($2.64 billion) over three straight fiscals. The carrier reported losses of Rs2,226.16 crore in 2007-08 and Rs5,548 crore in 2008-09.
"The airline has initiated action as part of the turnaround plan and is focusing on fleet and manpower rationalisation, route profitability, and structural changes. These plan envisages benefits of $382.2 million (Rs1,911 crore) for the current financial year," Patel said.
The cost saving moves undertaken by the airline will result in savings of Rs753 crore ($150.6 million) in fiscal 2010-11, Patel said.
Patel also revealed that the airline's outstanding fuel dues, as of January, stood at Rs1,741 crore ($348.2 million). "We have asked the airlines to clear the dues expeditiously."
The government has so far cleared equity infusion of Rs800 crore ($160 million) in order to allow the carrier to tide over cash flow problems.