Air India to incur losses to the tune of Rs.5,400 crore
Civil Aviation Minister Praful Patel said that the Public sector aviation company of India, Air India may have to bear a huge loss of $1.8 billion (Rs. 5,400 crore) crore during the financial year 2009-10. In the last two financial year viz. 2007-08 and 2008-09, too, the company has incurred losses to the tune of Rs. 2,226.16 crore and Rs. 5,548 crore, respectively. Thus taking the combined loss of the company over the last three financial years to $2.64 billion (Rs. 13,174 crore). The minister affirmed that the company may have to incur losses at least till the next three years i. e. 2013.
To deal with the rocky times the company has been going through over the last few years, it has taken several measure to control cost and increase profitability. It launched a turnaround and a cost reduction plan and revenue enhancement programme focusing on fleet rationalisation, route profitability, manpower rationalisation and structural changes.
As per the company, these measures have helped it to realize benefits equal to Rs 1,911 crore and savings upto Rs. 753 crore, during the current fiscal. The company is hopeful to improve its current situation if the cabinet approves its appeal to up the working capital of the company by $200 million.
