For Air In­dia, the past decade was marked by mis­steps that fur­ther eroded its fi­nances

India Today - - COVER STORY | AIR IN­DIA -


Ac­qui­si­tion of 111 air­craft for Rs 70,000 crore de­spite the air­line’s poor fi­nan­cial health

In De­cem­ber 2005, the Man­mo­han Singh gov­ern­ment ap­proved the pur­chase of 68 air­craft from Boe­ing. A year later, In­dian Air­lines signed up for 43 air­craft from Air­bus Group SE

The de­ci­sions have come un­der the scru­tiny of the CAG and CBI. The CBI’s FIRs in May 2017 charged for­mer avi­a­tion min­is­ter Pra­ful Pa­tel and un­named of­fi­cials with or­der­ing the pur­chases with­out trans­parency, caus­ing im­mense loss to the ex­che­quer


The Air In­dia-In­dian Air­lines merger in 2007 un­der the brand name Air In­dia was aimed at lever­ag­ing syn­er­gies, but it only cre­ated an­other lan­guish­ing en­tity

In 2002-03, the com­bined en­tity of In­dian Air­lines and Air In­dia lost just Rs 63 crore. Losses shot up to nearly Rs 7,000 crore in 2010-11


The CBI also raised charges of ir­reg­u­lar leas­ing of air­craft by Air In­dia with­out a proper route study and mar­ket­ing-pric­ing strat­egy

The CAG’s 2015 re­port pegged losses from leas­ing of air­craft at Rs 405.8 crore be­tween March 2011 and May 2014


A CAG re­port tabled in Par­lia­ment in March 2017 said Air In­dia in­curred a loss of over Rs 671 crore by sell­ing its five Boe­ing 777-200 long-range air­craft to Eti­had be­low cost price

The losses would be higher if we add Rs 324.6 crore paid as in­ter­est on loans to pro­cure th­ese air­craft

Only 17 of the air­line’s ser­vices re­cov­ered costs in 2015-16; 36 ser­vices ran into losses —M.G. Arun

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