Wednesday, May 24, 2017

Legacy issues continue to drag down Air India’s financial performance: Ashok Gajapathi Raju, Civil Aviation Minister

Even as the government has rolled out a national aviation policy and the Regional Connectivity Scheme (RCS) has been kicked off, the civil aviation ministry still needs to sort out several issues. Civil aviation minister Ashok Gajapathi Raju tells FE’s Malyaban Ghosh while Air India’s operational performance has improved, its legacy issues continue to drag down the airline’s financial performance. The turnaround plan has not helped solve any of the financial problems of the airline, the minister says. Excerpts:
Has Air India’s performance improved in the past three years?
If you look at different parameters, like the passenger load factor (PLF), on time performance (OTP) and utilisation of aircraft you will find that it has definitely improved from what it was during the period before that.On the financial side the problem still persists because there are legacy issues and the interest cost of R4,500 crore is hurting. Personally, I would like to see Air India to survive. However, if you leave it like that then chances of survival will become bleaker with every passing day because the financials are getting eroded. The turn around plan (TAP) or the financial reconstruction plan were good intentions and money has been infused from the government’s kitty, but it has not solved any problems.
Beyond the period stipulated under the TAP, Air India would still be at square one. There is a lot thinking and suggestions going on to reduce Air India’s debt.
Do you think issues related to lack of discipline among AI’s crew and pilots have reduced?
I think discipline among Air India’s crew and other employees have improved otherwise their OTP numbers would not have improved. They have simulators in Mumbai and Hyderabad whose utilisation were quite low but now that has picked up and are close to the internationally accepted norms. Their efficiency would not have gone up if had there been a discipline issue among the employees. Their performance shows they are capable of performing but the financials are so bad that it is pulling them down.
23/05/17 Malyaban Ghosh/Financial Express

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