By IANS,
New Delhi : Civil Aviation Minister Vayalar Ravi Wednesday blamed rising fuel prices, falling yields coupled with high interest rate and the very high employee-aircraft ratio as the main reasons for national carrier Air India posting a provisional estimated loss of Rs.6,994 crore loss in 2010-11.
“This is the result of escalating fuel prices, falling yields and high interest costs,” Ravi informed the Lok Sabha in a written reply.
According to Ravi, the financial position of the flag carrier and its turnaround plan (TAP) and financial restructuring plan (FRP) was being examined.
“The financial position of Air India is being intensively monitored by the government. The turnaround plan and with financial restructuring plan of Air India is presently being examined,” Ravi said.
Ravi further said there is a high employee-to-aircraft ratio in the national carrier, which stands at 263 employees per aircraft.
Currently, the airline expects a fresh equity infusion of Rs.1,200 crore followed by dues of around Rs.330 crore for operating VVIP flights.
The airline is laden with a cumulative debt of Rs.40,000 crore it incurred over aircraft acquisition and as short-term loans to maintain its operations.
But the decision on TAP and FRS was differed by the group of ministers (GoM) in mid-July for a latter date.
Prime Minister Manmohan Singh Wednesday admitted that national carrier Air India was facing “serious difficulties”, but added that the government would find ways to pay pending dues to its employees.
“That Air India is in serious difficulties is an open secret,” Manmohan Singh told the Lok Sabha, intervening during the question hour.
The government was asked what it was doing to pull the national carrier out of the financial crisis and pay its employees their salaries pending since June and performance-linked incentives pending since May.
“Air India doesn’t have resources to pay the salaries. But the government will find the ways and means to pay the wages of Air India employees soon,” the prime minister replied.