Sunday, March 12, 2017

Air India rot runs deep amid understating losses, bleeding international ops

New Delhi: Air India has been under reporting losses for at least four years, says the country’s top auditor. This under-reporting is not any insignificant amount but a sum of over Rs 6,800 crore between 2012-13 and 2015-16. The airline has, as expected, said it did not do any under provisioning while asserting that its Rs 105 crore operating profit in FY16 was indeed a profit, never mind the observations of the Comptroller & Auditor General (C&AG) that the airline actually posted an operating loss of Rs 321 crore last fiscal.

Since the two erstwhile airlines (Air India and Indian Airlines) merged to form the present entity, the measly Rs 105 crore operating profit was the first time in a decade that the word ‘profit’ was used for Air India in any form. Now even this figure has been called into question, raising doubts about the accounting standards followed by the state-owned carrier. As the airline and the C&AG continue to differ over what ‘provisioning’ actually means in standard accounting practice, it is interesting to examine the detailed explanations and instances C&AG has given in its report, of Air India’s operational blunders during the four years under review.
12/03/17 Sindhu Bhattacharya/First Post

0 Comments: