Air India's losses likely to be Rs 5400 cr in 2009-10

The National Aviation Company of India Limited (NACIL), formed to run national carrier Air India after its merger in 2007 with Indian Airlines, is expected to incur a loss of about Rs 5400 crore in 2009-10.

Minister of State for Civil Aviation Praful Patel told the Rajya Sabha in a written reply to a question today that NACIL had incurred a loss of Rs.2226.16 crores and Rs.5548 crores during 2007-08 and 2008-09, respectively.

The trend of losses is likely to continue for a few more years, Mr Patel said.

According to him, NACIL has initiated action as part of the turnaround plan along with cost reduction and revenue enhancement programme focusing on Fleet Rationalisation, Route Profitability, Manpower Rationalisation and Structural Changes.

The cost reduction/turnaround plan envisages benefits of Rs.1911 crores for the financial year 2009-10. However, NACIL has implemented various initiatives which will only result in savings of Rs.753 crores in the financial year 2009-10.

He said Air India’s total outgo on lease rental payments for 2007-08 was Rs.717.20 crores, for 2008-09, Rs.811.00 crores and for 2009-10 (upto February, 2010) Rs.759.25 crores ,respectively.

The outstanding fuel dues of NACIL till the end of January, 2010 was Rs.1,741 crores. The Government had advised NACIL to clear these dues expeditiously, Mr Patel said.

The Minister said additional measures to enhance revenues were part of the turnaround plan. These included measures to enhance yields and improve load factors that have remained depressed in the recent years. Additional measures to cut costs, including wage rationalization and other expenses, were also part of the turnaround process, he added.

NNN