(a) the operational performance of Air India on parameters such as passenger revenues, cargo revenues, available seat kilometres, revenue passenger kilometres and passenger load factor for Indian Airlines and Air India for post and pre merger period since 2004; and
(b) the steps being taken by the Ministry to improve these parameters?
ANSWER
THE MINISTER OF CIVIL AVIATION ( SHRI AJIT SINGH )
(a): Requisite information is annnexed.
(b): In order to improve its operating and financial performance, Air India has taken various steps such as i) Complete route rationalization of erstwhile Air India and Indian Airlines routes and elimination of route network involving parallel operations; ii) Rationalization of certain loss making routes; iii) induction of brand new aircraft on several domestic & international routes to increase passengers appeal; iv) Phasing out of old fleet and consequential reduction in maintenance cost; v) Return of leased aircraft at the end of their tenure or prematurely; vi) Freezing of employment in non-operational areas; vii) Redeployment of staff to cut in-fructuous expenditure; viii) Grounding of ageing fleet including B747-400 which would be used only for certain lines of operations and for operating VVIP flights; ix) Relocation of EDs/IBOs from abroad back to India; x) Closure of overseas offline offices at certain locations; xi) Dismantling of the Frankfurt hub and establishement of the Delhi hub resulting in substantial saving due to restructuring of routes; xii) Establishment of Integrated Operations Control Centres.
(a) whether it is a fact that GoM has cleared Rs.21,000 Crore debt restructuring plan for Air India;
(b) if so, the details thereof; and
(c) the reasons therefor?
ANSWER
The Minister of Civil Aviation (Shri Ajit Singh)
(a),(b) and (c): The GoM in the meetings held on 28.10.2011 and 07.02.2012, accepted the recommendations of the a Group of Officers constitued by GoM to vet the Financial Restructuring Plan/Turn Around Plan (FRP/TAP) of Air India which included the conversion of Rs.11,000 crores of working capital into long-term loans, issue of non-convertible debentures of Rs.7400 crores, guaranteed by the Government. The balance of the working capital would be in the form of a Cash Credit Arrangement with the Banks. This, coupled with equity infuision by Government, is to assit the airline in regaining its cash flow by postponement of debt repayment.
Will the Minister of CIVIL AVIATION be pleased to satate :- (a) whether Air India is facing financial crunch for the last two/three years. (b) if so, the details thereof; (c)whether Government/Management of Air India have taken any steps to improve the financial performance of the Company; (d):whether the Government has sanctioned Rs.250 crore as advance infusion; and (e) steps taken/being taken by Government to improve the financial performance of Air India?
ANSWER
MINISTER OF OVERSEAS INDIAN AFFAIRS & MINISTER OF CIVIL AVIATION ( SHRI VAYALAR RAVI ) (a) and (b): Yes, Sir. Air India incurred a loss of Rs.2226.16 crore during 2007-08, of Rs.5548.26 crore during 2008-09, of Rs.5552.55 crore during 2009-10 and the estimated loss for 2010-11 is Rs.6994 crore. (c) and (e): In order to improve its financial performance, Air India has taken various steps such as Rationalization of routes to cut losses, return of leased capacity, reduction of contractual employment, review of all agreement between management and staff on all technical and operational matters and constitution of Turn Around Committee (which includes representatives from senior management and unions) to look at all areas of reduction. (d): Pending payment of outstanding dues for VVIP operations, Government has paid an amount of Rs.500 crore on ad-hoc basis from the equity provision of Rs.1200 crore to Air India.
Will the Minister of CIVIL AVIATIONbe pleased to state :- (a) the details of upgraded policy for national carrier Air India for purchase of aircrafts; (b) whether the Ministry has purchased aircrafts worth over 50,000 crore during the last 5-6 years for erstwhile Indian airlines and Air India; (c) whether CAG has questioned and sought replies on the merger of AI and IA, loss of market share, amount of losses and even policy of giving upgrades on the airlines; (d) if so, the details thereof; and (e) the details of total loss to the Government Exchequer due to merger of AI and IA and loss of market share?
ANSWER
MINISTER OF OVERSEAS INDIAN AFFAIRS & MINISTER OF CIVIL AVIATION ( SHRI VAYALAR RAVI ) (a) and (b): Erstwhile Air India and Indian Airlines had placed orders with M/s Boeing and M/s Airbus Industries for purchase of 68 and 43 aircraft respectively during 2005/2006. (c), (d) and (e): As per established procedure, the CAG made certain observations which after replies are under examination of the CAG. The losses incurred by the airline are primarily because of increase in fuel prices, increase in interest and depreciation costs, increase in wage bill and increase in leasing and maintenance cost.
(a) the operational performance of Air India on parameters such as passenger revenues, cargo revenues, available seat kilometres, revenue passenger kilometres and passenger load factor for Indian Airlines and Air India for post and pre merger period since 2004; and
(b) the steps being taken by the Ministry to improve these parameters?
ANSWER
THE MINISTER OF CIVIL AVIATION ( SHRI AJIT SINGH )
(a): Requisite information is annnexed.
(b): In order to improve its operating and financial performance, Air India has taken various steps such as i) Complete route rationalization of erstwhile Air India and Indian Airlines routes and elimination of route network involving parallel operations; ii) Rationalization of certain loss making routes; iii) induction of brand new aircraft on several domestic & international routes to increase passengers appeal; iv) Phasing out of old fleet and consequential reduction in maintenance cost; v) Return of leased aircraft at the end of their tenure or prematurely; vi) Freezing of employment in non-operational areas; vii) Redeployment of staff to cut in-fructuous expenditure; viii) Grounding of ageing fleet including B747-400 which would be used only for certain lines of operations and for operating VVIP flights; ix) Relocation of EDs/IBOs from abroad back to India; x) Closure of overseas offline offices at certain locations; xi) Dismantling of the Frankfurt hub and establishement of the Delhi hub resulting in substantial saving due to restructuring of routes; xii) Establishment of Integrated Operations Control Centres.
(a) whether it is a fact that GoM has cleared Rs.21,000 Crore debt restructuring plan for Air India;
(b) if so, the details thereof; and
(c) the reasons therefor?
ANSWER
The Minister of Civil Aviation (Shri Ajit Singh)
(a),(b) and (c): The GoM in the meetings held on 28.10.2011 and 07.02.2012, accepted the recommendations of the a Group of Officers constitued by GoM to vet the Financial Restructuring Plan/Turn Around Plan (FRP/TAP) of Air India which included the conversion of Rs.11,000 crores of working capital into long-term loans, issue of non-convertible debentures of Rs.7400 crores, guaranteed by the Government. The balance of the working capital would be in the form of a Cash Credit Arrangement with the Banks. This, coupled with equity infuision by Government, is to assit the airline in regaining its cash flow by postponement of debt repayment.
Will the Minister of CIVIL AVIATION be pleased to satate :- (a) whether Air India is facing financial crunch for the last two/three years. (b) if so, the details thereof; (c)whether Government/Management of Air India have taken any steps to improve the financial performance of the Company; (d):whether the Government has sanctioned Rs.250 crore as advance infusion; and (e) steps taken/being taken by Government to improve the financial performance of Air India?
ANSWER
MINISTER OF OVERSEAS INDIAN AFFAIRS & MINISTER OF CIVIL AVIATION ( SHRI VAYALAR RAVI ) (a) and (b): Yes, Sir. Air India incurred a loss of Rs.2226.16 crore during 2007-08, of Rs.5548.26 crore during 2008-09, of Rs.5552.55 crore during 2009-10 and the estimated loss for 2010-11 is Rs.6994 crore. (c) and (e): In order to improve its financial performance, Air India has taken various steps such as Rationalization of routes to cut losses, return of leased capacity, reduction of contractual employment, review of all agreement between management and staff on all technical and operational matters and constitution of Turn Around Committee (which includes representatives from senior management and unions) to look at all areas of reduction. (d): Pending payment of outstanding dues for VVIP operations, Government has paid an amount of Rs.500 crore on ad-hoc basis from the equity provision of Rs.1200 crore to Air India.
Will the Minister of CIVIL AVIATIONbe pleased to state :- (a) the details of upgraded policy for national carrier Air India for purchase of aircrafts; (b) whether the Ministry has purchased aircrafts worth over 50,000 crore during the last 5-6 years for erstwhile Indian airlines and Air India; (c) whether CAG has questioned and sought replies on the merger of AI and IA, loss of market share, amount of losses and even policy of giving upgrades on the airlines; (d) if so, the details thereof; and (e) the details of total loss to the Government Exchequer due to merger of AI and IA and loss of market share?
ANSWER
MINISTER OF OVERSEAS INDIAN AFFAIRS & MINISTER OF CIVIL AVIATION ( SHRI VAYALAR RAVI ) (a) and (b): Erstwhile Air India and Indian Airlines had placed orders with M/s Boeing and M/s Airbus Industries for purchase of 68 and 43 aircraft respectively during 2005/2006. (c), (d) and (e): As per established procedure, the CAG made certain observations which after replies are under examination of the CAG. The losses incurred by the airline are primarily because of increase in fuel prices, increase in interest and depreciation costs, increase in wage bill and increase in leasing and maintenance cost.
