AI looking for new routes, says Ravi

August 20th, 2011 - 5:11 pm ICT by IANS  

Pranab Mukherjee New Delhi, Aug 20 (IANS) National carrier Air India will operate flights on new routes as and when an opportunity arrives, the government said Saturday.

“We will take a decision on the new routes when the opportunity comes,” Civil Aviation Minister Vayalar Ravi told reporters on the sidelines of an industry event here.

The action on the airline’s turnaround and financial restructure plan would be taken after the sub-committee formed to review the plans, submits its report to the group of ministers (GoM) headed by Finance Minister Pranab Mukherjee, according to Ravi.

The GoM would meet in mid-september, he said.

Recently the GoM extended the airline’s credit limit to buy oil from the state-run oil marketing companies (OMCs) by two to three months.

“Now instead of cash and carry, Air India has been given two to three months credit extension by OMCs,” Ravi had told reporters after a meeting here of the GoM.

Ravi had added that the assurance for extending the credit limit to buy jet fuel from the OMCs was given by Petroleum Minister S. Jaipal Reddy.

The state-run OMCs had put the flag carrier on a cash and carry basis - which basically means that the airline was required to pay whenever it bought fuel from these companies.

Currently, the airline owes Rs.2,300 crore to the OMCs. It buys Rs.17 crore of fuel daily from them.

The company’s inability to pay the dues and rising jet fuel prices had forced OMCs to cut fuel supply to the airline in May end, forcing Air India and its low-cost international subsidiary Air India Express to cancel 147 flights from May 27 to June 2.

The company incurred losses worth Rs.10 crore at that time.

Currently Air India’s cumulative losses amount to Rs.22,165 crore, apart from a Rs.22,000 crore debt-burden to buy new aircraft.

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