Revised AI plan projects operational profit in 5 yrs

New Delhi: Air India will start making operating profit five years after its turnaround plan is implemented, says the revised outlook of the company. The new plan is likely to be discussed in the meeting of the group of ministers to be held next week.
Air India had earlier projected it would start making operating profits from the first year after the turnaround plan is implemented. A finance ministry sub-committee, formed to review the initial plan, had asked the airline to revise its projections and targets since in the earlier turnaround plan, which projects operational profit from the first year itself.
“According to the revised plan, we will start making operational profit after five years of the implementation of the plan and become a profitable airline in three years after that,” said a senior Air India official, requesting anonymity. The carrier has accumulated losses of Rs 20,000 crore since 2007.
The projections in the new turnaround plan are on the basis of a growth rate of 12 per cent per annum annum compared to a growth rate of 18 per cent in the earlier plan.
Under the new plan, the airline has demanded an equity infusion of Rs 43,000 crore till 2021. For the current year, it wants infusion of Rs 8,373 crore, an upfront equity infusion of Rs 6,600 crore and support of Rs 1,772 crore in the form of a guarantee on short-term loans for this financial year.
Of this, the government had already infused Rs 1,200 crore in the current financial year.
22/09/11 Mihir Mishra/Business Standard

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Categories: Air India Sep 2011