Air India may stay in the red till end-2017

New Delhi: Beleaguered flag carrier Air India will continue to accumulate losses for at least another seven years, the Union civil aviation ministry told a group of ministers (GoM) meeting on Wednesday.
“The projections are that even at the end of 2017, we will still be in losses,” an aviation ministry official who was present at the meeting told Mint on condition of anonymity. “That is not a situation the government can accept. All options are open now.” Union home minister P. Chidambaram had asked for an extrapolation of Air India’s balance sheets in a GoM meeting in November.
Air India, run by National Aviation Co. of India Ltd, has already accumulated losses of Rs7,200 crore and is saddled with debt of Rs15,241 crore. It is making payments for 111 aircraft worth Rs50,000 crore.
Wednesday’s hour-long GoM meeting was attended by Chidambaram, finance minister Pranab Mukherjee, petroleum minister Murli Deora, civil aviation minister Praful Patel and Air India chief Arvind Jadhav.
“These are testing times for the aviation industry... Extraordinary measures need to be taken,” Patel said after the meeting. The minister added the airline was unlikely to meet its target of reducing costs by Rs2,000 crore by March. Air India has shown savings of just Rs753 crore in the previous six months.
Ministers also slammed the airline’s restructuring plan and refused additional equity infusion until it achieved the cost-saving target.
03/02/10 PTI/Tarun Shukla/Live Mint

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Categories: NACIL Feb 2010