By IANS,
New Delhi: Air India’s low-cost carrier Air India Express will launch its domestic operations with 27 flights a day mid-September and increase it to 75 later, a top company official said here Friday.
“This will improve our bottomline. We expect to benefit Rs.180-200 crore,” said Air India chairman and managing director Arvind Jadhav at a media briefing.
The low-cost services will be started with 10 aircraft.
The loss-making Air India has also committed before a committee of secretaries, which is looking into its financial health, that it would achieve a turnaround within 24-36 months.
“NACIL (National Aviation Co of India Ltd that owns the carrier) will have to change the way it does its business and we will do it. Our top priority is execution and accountability,” Jadhav said while releasing the revival roadmap of the carrier for the next 36 months.
Among other plans, Jadhav said Air India would also take the primary market route in 2011-12.
Refuting reports that Air India was looking for a bailout package from the government, he said: “We have a Rs.60,000-crore debt. We have only asked for an opinion from the government, which is also our stakeholder.”
Jadhav added that he has not written even a single letter to the government asking for any bailout measures.
Earlier there were reports that Air India had sought the government’s help and asked it for an equity infusion of about Rs.2,500 crore and a soft loan of Rs.10,000 crore for five years.
“The government is our stakeholder. We will seek our stakeholders’ opinion about steps that need to be taken to overcome the crisis. If we fail to get what is required, we would look at the market,” said the chairman.
Air India is estimated to have suffered a loss of Rs.7,200 crore in 2008-09. It is currently overburdened by its working capital borrowings of Rs.17,000 crore and has overdrafts from 15 banks.
The airline has high cost debts and is looking to convert it to low-cost debts for which it needs the help of the government as a guarantor.
While the government is likely to make only a partial contribution, a major part of this package is likely to be through partial disinvestment of the government equity or issuance of initial public offer, which the airlines plans to go two years later.
The airline is also looking at restructuring its existing fleet. “The plan is to phase out the old aircraft and return the leased ones,” Jadhav said.
He further claimed that the airlines contributed Rs.4,500 crore to the exchequer.
The airline chairman added that Air India was also planning to launch MRO (maintenance repair and overhauling) business across the country.
“We can start as MRO units also. At present aircraft in India go abroad for checks. If we are able to handle it, it would generate a business of Rs.4,000 crore,” he said adding: “If cargo operations were handled well, it would earn Rs.3,000 crore.”