Govt rules out privatisation of Air India

Jul 15 2014, 18:57 IST
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Government today ruled out privatisation of Air India for now and said its financial parameters have been improving since 2012 when its turnaround plan was approved. Government today ruled out privatisation of Air India for now and said its financial parameters have been improving since 2012 when its turnaround plan was approved.
SummaryGovernment ruled out privatisation of Air India for now and said its financial parameters...

Government today ruled out privatisation of Air India for now and said its financial parameters have been improving since 2012 when its turnaround plan was approved.

"No sir. No such proposal is under consideration of the government at present," Minister of State for Civil Aviation GM Siddeshwara said in the Rajya Sabha.

He was asked whether privatisation of Air India was being contemplated owing to the losses suffered by it.

On whether the government would conduct a comprehensive study to strengthen Air India's financial position, he said the government had approved the turnaround and financial restructuring plans in 2012.

"Since then, Air India has shown improvement in its financial parameters ... and therefore, no further study is envisaged at this stage," Siddeshwara said.

The post-tax losses suffered by the national carrier had come down from Rs 7,560 crore in 2011-12 and Rs 5,490 crore in 2012-13 to Rs 5,389 crore in 2013-14.

Its operating loss was also on the decline from Rs 5,141 crore in 2011-12 and Rs 3,807 crore in 2012-13 to Rs 2,124 crore in 2013-14, he said.

The airline was expected to be EBIDTA (earnings before interest, depreciation, taxes and amortization) positive by Rs 771 crore in 2013-14 as against Rs 192 crore in 2012-13.

While its passenger load factor (average seats per aircraft filled) had risen to 73.6 from 72.4 per cent in the same period, its cargo revenue also grew by over Rs 345 crore, Siddeshwara said.

Government has infused equity of Rs 1,200 crore in 2011-12, Rs 6,000 crore in 2012-13 and provisionally Rs 6,000 crore in 2013-14, he said.

The airline's outstanding debt for aircraft purchase stood at Rs 17,565 crore, while the equity for already guaranteed aircraft loan till 2020-21 was Rs 18,929 crore, the Minister said in response to another question.

After joining Star Alliance, Air India's passenger revenue is expected to rise by 3-5 per cent as a result of cross-feed to and from the partner airlines of this global airlines' grouping, he said, adding this move would benefit the passengers as well.

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