New Delhi, Nov 7: With Government equity infusion in Air-India (AI) ruled out in this fiscal, the airline has said that it is confident of standing on its own two feet. "There is no crises in Air-India just because the funds recommended by the Disinvestment Commission are not forthcoming. AI has assets worth over Rs 10,000 crore, so there is no problem in setting our house in order" said AI official spokesperson Jitender Bhargava.AI's operating surplus in the first six months of this fiscal, against a projected loss, has added to the airline's confidence. AI has also recently gone in for a quiet asset evaluation exercise which pegged its assets at Rs 12,000 crore.
"Purchasing a couple of aircraft does not pose any problems for us " said Bhargava.
"Of course, we will have to seek Government approval for any steps in this direction" he added.
The state-run AI has posted an operating surplus of Rs 8 crore in the first half of 1999-2000. It has reduced its net loss from Rs 126 crore in the first sixmonths of 1998-99 to Rs 6 crore in H1 this fiscal.
AI has now projected that it will end this year with an operating profit. The winter months of November, December and January also promise to be profitable for the airline.
AI has registered a passenger load factor of 69.7 per cent in the first half of the current fiscal which is 1.5 per cent higher than last year.The airline has said that it owes its financial turnaround to successful strategies such as the decision to withdraw from key routes such as Frankfurt, Rome, Manchester and Geneva earlier this year.
AI also lobbied hard with the Government to get the retirement age back to the original level to cut down on its wage bill. It has also reduced the number and size of its offices abroad.
The biggest task for the Maharajah, though, will be the trimming of its accumulated losses and borrowings.
The annual interest outgoings of AI on loans (aircraft as well as working capital) is Rs 625 crore. Its total accumulated losses till 1997-98 was aroundRs 1,000 crore.
In August itself, AI opted for a $100 million FCNR (foreign currency non-resident Indian) loan to meet its working capital requirements. The airline opted for the FCNR loan route due to the slight improvement in its financial position. AI is targetting to slash its net loss from the projected Rs 140 crore to Rs 50 crore in the current fiscal.
Its debt burden, though, can go down only if the airline is able to pay-off earlier loans borrowed to meet day-to-day requirements of capital as well as generate a healthy cash flow.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.