Air India incurred loss of `321.4 cr in FY16: CAG

Carrier reported operational profit of `105 cr in FY16 for first time in decade

THE COMPTROLLER and Auditor General of India (CAG) on Friday said Air India actually incurred an operating loss of Rs 321.4 crore in 2015-16 instead of an operating profit as reported by the airline. The CAG also said that the benefits for Air India from the financial restructuring plan have been largely eroded by high volume of short-term loans.

The debt laden carrier saw its short-term loans rising to four times the limits laid down in its turnaround plan. The increase in loans was “due to failure in generating projected revenue, mainly on account of nonachievement of asset-monetisation target, increase in staff costs,” the CAG said.

While making it clear that there was no fudging of numbers, officials at the CAG said figures reported by the airline are “actually under-reporting of loss”. Air India reported an operational profit of Rs 105 crore in 2015-16 for the first time in a decade.

“For 2015-16 where Air India has reported an operating profit of approximately Rs 105 crore, the audit of Air India’s standalone accounts for 2015-16 has been completed,” Deputy CAG Pradeep Rao said, as per a PTI report. About the operating profit which Air India has stated it has made in 2015-16, Rao said that in the view of CAG, “it is actually an operating loss of Rs 321.4 crore”.

Based on the observations made by statutory auditor of the company and the subsequent check by CAG, “we have found that they have not made provisions which they should have made in terms of standard accounting procedures”, he noted. The CAG’S performance audit report on the stateowned carrier, which covered the period from 2010-11 to 201516, was tabled in the Parliament on Friday.