Equity Fund Infusion Into AI

GOVERNMENT OF INDIA

MINISTRY OF  CIVIL AVIATION

RAJYA SABHA

QUESTION NO  1102

ANSWERED ON  01.12.2011

Will the Minister of CIVIL AVIATION be pleased to satate :-
(a) whether Government is considering for equity fund infusion into Air India (AI);

(b) if so, the details thereof and reasons therefor;

(c) the details of equity fund injected during the last three years into Air India;

(d) the financial performance details of Air India for the last three years; and

(e) the intended measures to improve the performance of AI?
   
ANSWER
     
THE MINISTER OF OVERSEAS INDIAN AFFAIRS & MINISTER OF CIVIL AVIAITON (SHRI VAYALAR RAVI)

(a) and (b): Government has constituted a Group of Ministers(GoM) to reveiw/monitor the financial and oparational performance of Air India. On the directions of GoM, Air India had prepared its Turn Around Plan (TAP) and Financial Restructuring Plan (FRP), which have been examined by a Group of Officers (GoO). The recommendations of GoO have been referred by GoM for RBI’s views and regulatory forbearance on FRP.

(c): Government has infused Rs. 800 crore in the FY 2009-10, Rs. 1200 crore in FY 2010-11 and Rs.1200 crore for the FY 2011-12 as equity in Air India.

(d): Air India incurred a loss of Rs.5548.26 crore during 2008-09, Rs.5552.55 crore during 2009-10 and the estimated loss for 2010-11 is Rs.6994 crore.

(e): In order to improve its operating and financial performance, Air India has taken various steps such as Rationalization of routes to cut losses, induction of new aircraft on international routes to increase passenger appeal, phasing out of old fleet and consequential reduction in maintenance cost, return of leased aircraft at the end of their tenure or prematurely, enhanced utilizationof the new fleet resulting in production of higher ASKMs, Grounding of ageing fleet including B747-400 which would be used only for certain lines of operations and for operating VVIP flights,Increase in passenger/cargo revenue, excess baggage revenue through aggressive sales & marketing efforts including for attracting government traffic and upgradation of IT Infrastructure and solutions.

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Financial Crunch In Air India

GOVERNMENT OF INDIA

MINISTRY OF  CIVIL AVIATION

QUESTION NO  1277

ANSWERED ON  11.08.2011

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.

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Air India's Policy For Purchase Of Aircrafts

MINISTRY OF CIVIL AVIATION 

UNSTARRED 

QUESTION NO . 324 

ANSWERED ON 24.02.2011

Will the Minister of CIVIL AVIATION be 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.

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