Air India’s turnaround is appearing to be a “tough task”, chairman Ashwani Lohani said on Wednesday even as the government is trying to help national carrier come out of the woods.
In April, Minister of State for Civil Aviation Mahesh Sharma informed Parliament that Air India may trim losses by more than half to Rs 2,636 crore in FY16 as compared to a net loss of Rs 5,859.91 crore in FY15.
The debt-laden carrier’s profits are eroded by hefty interest cost and airport charges while increasing competition from budget carriers is slowing cash flows. Exchange rate variation due to weakening of Indian rupee are reasons for the carrier’s estimated net loss of Rs 2,636 crore during 2015-16.
The national carrier was given a Rs 30,231-crore lifeline by the Finance Ministry in 2012 under a turnaround plan stretching over a period of nine years to keep it afloat.
This equity infusion also includes the financial support towards repayment of principal as well as interest on government-guaranteed loans taken for aircraft acquisition by the airline.
As per the 2012 Turn Around Plan (TAP), the government will infuse Rs 18,929 crore for repayment of government- guaranteed loans/interest till FY 2010-21, Sharma said.
Till March, the government has already infused Rs 22,280 crore into the carrier as part of the bailout package.
The government has already approved Rs 1,713 crore equity infusion into the carrier for the current fiscal in line with TAP.
Despite all these efforts, Lohani said turning-around Air India is a tough task. Dominic Moore JerseyShare This