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Wednesday, June 30, 1999

IA misleading on Turboprop deal cost, says ministry 

UNITED NEWS OF INDIA  
Indian Airlines has been misleading everyone with skewed financial figures' that it will suffer losses of Rs 1000 crore over the next 20 years if it were to induct six 50-seater ATR 42-500 aircraft, civil aviation ministry sources charged on Tuesday.

The issue of procuring the Turboprop planes for operations in the loss making north-east routes is to come up before the Public Investment Board on Wednesday.

The sources said the IA has arrived at the Rs 1000 crore figure after having projected revenue as remaining constant for the next 20 years while costs is projected to escalate at between eight to ten per cent per year over the next two decades.

``Under such skewed costing practices, it is needless to explain why the ATR 42 programme will show such high losses. So will any aircraft type for that matter. What it means in simple terms is that if you charge Rs 100 today on an airfare, it will remain Rs 100 in 20 years. Even the cost of potatoes goes up annually'', the sources said.

Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.


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