AI deep in red; Indian reports tidy profit

Mumbai: Last Friday evening, the Air India board met to pass the accounts for the financial year 2006-07. According to the original financial documents presented to the board, the airline had recorded a net loss of Rs 541.3 crore for 2006-07, its biggest ever.
“It is a sad day in the 70-year-old history of Air India,” said a functional director of the airline, who slipped out of the meeting to talk to ET. Air India had reported a profit after tax of Rs 14.94 crore in 2005-06.
Insiders said that losses would have been close to Rs 1,100 crore, were it not for a range of ‘smart’ measures to lessen the impact. Air India’s two auditors, Kalyaniwala and Mistry and SK Mehta and Co, had qualified the accounts with comments on each of these measures.
Apparently, ICICI Bank chairman N Vaghul, an independent director on the board, had raised a range of issues relating to the auditor’s qualifications.
“The final losses could be in the region of Rs 700 crore,” said a senior executive close to the developments.
The same board, which met for the Air India board meeting, also discussed and passed Indian’s accounts. Fortunately, Indian was able to buck the trend and report a tidy profit of Rs 57 crore during the same period. So even though Air India’s net worth has turned negative, the company is banking on Indian’s capital base to bail it out.
24/11/07 Cuckoo Paul/Economic Times

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Categories: Air India - International Nov 2007, Air india Budget Nov 2007, Air India Domestic Nov 2007, NACIL Nov 2007