IA, AI offset FY07 losses

New Delhi: State-owned carriers Indian Airlines and Air India have suffered massive operational losses of Rs 500 crore and Rs 300 crore, respectively, in 2006-07, according to their unaudited results that are still to be made public. But the carriers used big income from the sale and lease-back of aircraft to offset these losses, resulting in a nominal net profit on the balance sheets last financial year, sources said.
The disclosure of over Rs 800 crore of operational losses (on a combined revenue of Rs 15,466 crore) of the two carriers could be a major setback to the valuation of the merged entity, National Aviation Company (NACL), that hopes to go public in 2008. The merger of Air India and Indian Airlines is expected to fetch NACL Rs 600 crore annually due to synergy benefits.
Indian Airlines sold and leased seven Airbus A320s back and received between $150-$160 million in cash to increase its topline by between Rs 608.85 crore and Rs 649.44 crore. Air India sold and leased back six long-haul aircraft Airbus A310s for $80 million, boosting its profit by Rs 320 crore.
25/05/07 Atreyee Dev Roy/Financial Express

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Categories: Air India May 2007, Indian May 2007