The Hindu Business Line : Air India losses pile up to Rs 4,000 cr in 2008-09

Mumbai, May 12 National Aviation Company of India (NACIL), the holding company formed after the merger of Air India and Indian Airlines, has nearly doubled losses for 2008-09 to roughly Rs 4,000 crore from Rs 2,226 crore in the preceding fiscal. The company has borrowings of approximately Rs 15,000 crore, which has been on account of large-scale acquisition of aircraft.

“This does not mean Air India (the merged entity) is the only airline losing money. But its losses are a little more than the others simply because its cost structure has always been traditionally higher,” the Civil Aviation Minister, Mr Praful Patel, told reporters here after a NACIL review meeting.

He added that the long-pending joint venture between Air India and SATS (Singapore Airport Terminal Services) for ground handling services had been approved.

IT systems integration

According to Mr Patel, the issue of integrating IT systems for the former Air India and Indian Airlines would see some headway this week. The biggest obstacle for Air India in becoming a part of Star Alliance was the absence of same flight-code between AI and IA.

“IT integration has been pending for the last one-and-a -half years but should be finalised in a day or two,” the Minister said. The eventual integration will take 9-10 months for which US-company EDS Aviation has bagged the contract, he added.

NACIL has ordered 111 aircraft costing Rs 40,000 crore from Boeing and Airbus to be delivered by 2012. These will replace the existing fleet and also expand the network. Of the total order, 45 jet planes have been delivered.

During 2009-2010, the airline will induct 30 aircraft, of which seven are Boeings while Airbus takes up the rest.

Mr Patel reiterated that the equity infusion into Air India from the Government’s side was on the cards. He said this year’s Budget was likely to provide Rs 4,000-5,000 crore towards this infusion as well as soft loan. This is the first time since its inception that the Government would pump equity into Air India.