New Delhi: The Air India board on Tuesday approved a plan to float a Rs2,000-crore bond issue through Air India Charters Ltd, a profitable subsidiary which runs low-cost operations under the brand name of Air India Express.
The airline board, which met in Mumbai on Tuesday, also approved plan to sell property worth Rs10 crore in Paris.
Among other decisions, the board accepted the resignations of chief operating officer Gustav Baldauf and chief training officer Stephen Sukumar. Baldauf resigned after criticising the government for constant interference in the carrier’s day-to-day management. Sukumar quit after his foreign aircrew temporary authorisation licence was not released by the Directorate General of Civil Aviation (DGCA), which had asked for documents supporting his flying hours claim.
AI Express, with a fleet of 21 Boeing aircraft, connects 14 international destinations in South-East Asia and West Asia. All its flights have an occupancy over 80 per cent, earning it an annual revenue of around Rs3,000 crore. This is huge, considering AI with 130 aircraft earns only about Rs10,000 crore.
AI has accumulated losses of over Rs15,000 crore. It lost Rs2,226 crore in 2007-08, Rs7,189 crore in 2008-09, and Rs5,551 crore in 2009-10. It has an interest payment outgo of Rs1,800 crore annually, on a debt of Rs40,000 crore (working capital debt of 21,000 crore and the rest being long-term), on an equity base of Rs2,145 crore.
Meanwhile, Air India, which also does ground handling for other international airlines, has received the safety audit certification for ground operations by the International Air Transport Association (IATA). The IATA has developed the commercial standards for the airline industry, and conducts safety audits of the airlines on procedures. Erstwhile Air India, had in 2003, been the first airline in India to clear the IATA Operational Safety Audit.
16/02/11 Business Standard
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