Patel may soon have to declare Air India sick company

New Delhi: As India's civil aviation minister, Praful Patel had staunchly fought against any move to declare Air India a sick company. But as the new minister for heavy industries and public enterprises, Patel may have to declare the national carrier a sick company.
Patel's ministry has notified a new criterion to identify state-run firms that are terminally sick. Air India may fall in this category if the new norms are applied to the debt-ridden carrier.
The new norms, notified by the department of public enterprises a day after Patel took charge, say a financially troubled state-run firm would be considered a 'turnaround ' case only if it had reported profits in three preceding financial years. Also, the profits should be without any grants from the government or a loan waiver from a financial institution.
But Air India reported losses in the past two fiscals, although it has succeeded in cutting these losses. The carrier posted a loss of Rs 7,189 crore in 2008-09 and Rs 5,551 crore in 2009-10. The carrier had a debt of around Rs 40,000 crore against an equity base of Rs 1,000 crore.
24/01/11 IANS/Economic Times

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Categories: Air India Jan 2011