CAG says AI lost Rs 5,000 crore in bad deals

New Delhi: Air India was delivered a double whammy by UPA-I, it has come to light.
An RTI reply from the government has revealed that Arvind Jadhav, who was made chairman of AI in 2009 just before the last general election, had been rejected for the position a year ago as he did not have any experience in aviation.
But UPA-I mysteriously chose to replace Raghu Menon with Jadhav at a time when the election code of conduct was in place. Menon had steadfastly refused to sign a controversial ground handling deal with a foreign company and had asked for a one- or two-year ban on giving any more flying rights to Gulf and South East Asian carriers to avoid revenue loss to AI.
The Comptroller and Auditor General (CAG) has found that AI and erstwhile Indian Airlines lost close to Rs 2,000 crore in the 111 aircraft deal struck for them during UPA-I through faulty purchase and bridge loan deals and also avoidable expenses incurred by delay in returning leased planes once new ones started joining the fleet.
The figure of total aircraft acquisition-related losses could have been closer to Rs 5,000 crore as the CAG found that erstwhile IA opted for costlier loans for buying 21 Airbus aircraft leading to a loss of Rs 315 crore till last March.
07/08/11 Times of India

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Categories: Air India Aug 2011