Air India To Lose Around Rs 5400 Crore (09-Mar-2010)
The Civil Aviation Minister Praful Patel yesterday said that Air India, the National carrier, is expected to posts $1.8 billion (Rs.5,400 crore) of losses this financial year and the trend is likely to continue for a few more years.
The state-owned carrier is run by the National Aviation Co. of India Ltd (NACIL).
The minister told Rajya Sabha "The trend of losses is likely to continue for a few more years".
However, he did not specify the timeline when the air carrier would start posting profits.
With this expected losses in 2009-10, the losses of the national carrier will surge to over $2.64 billion (Rs.13,174 crore) in three straight financial year.
Meanwhile, the carrier had posted $445.2 million (Rs.2,226.16 crore) of losses in 2007-08 while $1.11 billion (Rs.5,548 crore) in 2008-09.
Besides this, Patel said that as a part of turnaround plan, an action has been initiated by the airline and is focusing on fleet and manpower rationalisation as well as route profitability and structural changes.
He also said that these plan envisages $382.2 million (Rs.1911 crore) of benefits for current fiscal.
These initiatives will only result in savings of $150.6 million (Rs.753 crore) in 2010-11 fiscal, he said.
Moreover, the minister also said that the outstanding fuel dues of the airline till the end of January stood at $348.2 million (Rs.1741 crore).
However, he said that the ministry has asked the airlines to clear the dues expeditiously.
Meanwhile, the national air carrier is waiting for a cabinet approval in order to raise its working capital by $200 million (Rs.1,000 crore).
The airline''s working capital currently stood at $3.4 billion (Rs.17,000 crore).
Last month, the government approved $160 million (Rs.800 crore) of equity infusion for the ailing carrier in two instalments in order to tide over the cash flow problem and finance fleet acquisition plans.
Meanwhile, in order to cater for the latter''s GEnx-1B engines, Air India and GE Aviation is eyeing to jointly make an investment of $90 mn to establish a Maintenance, Repair and Overhaul (MRO) facility in Mumbai.
Mr. Nalin Jain, Director (Indian Operations) of GE Aviation earlier this week said that the company will invest $20 mn, while the remaining amount would be pumped in by Air India. GE''s investment will be spread over 7-8 years.
Both the companies has entered into an agreement, under which Air India will be licensed to perform MRO work on the GEnx-1B engine, which powers Boeing 787 aircraft. Also the GE Aviation will provide technical support to Air India.
Air India has ordered 27 GEnx-1B powered 787 planes.
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