Government mulls more funds to keep Air India flyingSeptember 19th, 2011 - 7:10 pm ICT by IANS
Bangalore, Sep 19 (IANS) The central government is open to infusing more funds into the cash-strapped state-run Air India Ltd to keep it flying, union Civil Aviation Minister Vayalar Ravi said Monday.
“The government is committed to look after Air India. We will ensure it has a cash flow and is in a better position to meet its expenditure like salary and fuel charges,” Ravi told reporters on the margins of a civil aviation conference.
Admitting that the debt-ridden and loss-making national carrier would not turn profitable in the immediate future, Ravi said the strategy was to make the airline stand on its feet in the next six months.
“I think situation will improve. The prime minister (Manmohan Singh) has agreed for appointing four directors from outside the organsation to the posts of marketing, human resources, finance and commercial,” Ravi said after inaugurating the regional celebration of “Civil Aviation Centenary” and addressing a seminar on the “Strategies for Growth of Civil Aviation in the Current Decade”, orgainsed by the Society of Indian Aerospace Technologies & Industries (Siati).
With the appointment of civil aviation joint secretary Rohit Nandan as the new chairman and managing director (CMD) of Air-India August 12, the ministry is waiting for the outcome of the group of ministers constituted to restore the airline’s health.
“The next GoM meeting is scheduled to be held this week or next week to discuss, among other things, turnaround strategy and financial restructuring,” Ravi asserted.
After merging the state-run domestic carrier Indian Airlines, Air India’s cumulative loss had mounted to a whopping Rs.22,165 crore and debt burden to Rs.22,000 crore, raised to buy new aircraft for fleet expansion, replacement and on more routes.
The beleaguered airline posted a loss of Rs.6,694 crore for last fiscal (2010-11), forcing the government to infuse more funds to bail it out of its operational crisis.
With a combined fleet of 81 aircraft, Air India flies to 64 destinations, including 17 overseas.
Rationalisation of loss-making routes, rescheduling of aircraft, return of leased aircraft, redeployment of manpower and a reduction in contractual employment are under the consideration of the ministry for reviving the airline’s fortunes.
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