Air India expects to reduce losses by 20% to Rs 4,345.78 crore in FY15, minister of state for civil aviation Mahesh Sharma told Rajya Sabha on Friday. The state-owned airlines has been making losses for a long time, and the government has not been able to turn it around.
Sharma said that losses were incurred due to the entry of low-cost airlines, high fuel costs, increasing depreciation expenses, a falling rupee, an increase in interest in aircraft loans, fall in premium traffic, and high airport charges. However, he did not disclose the routes causing the maximum loss.
The minister said there has been an 8.5% increase in passenger traffic and passenger load factor has also gone up to 73.6% from 72%. He hoped that with the new government’s restructuring plan things will become better.
“The government has approved the turnaround plan and financial restructuring plan to improve the operational and financial performance of Air India. The government has approved the infusion of equity of Rs 30,231 crore up to 2021, subject to the achievement of certain milestones laid down by Air India,” Sharma said.
The entire road map and the plan will be overseen by an oversight committee comprising the civil aviation secretary, the expenditure secretary, AS&FA and the joint secretary of the ministry of civil aviation.