Minister of State in the Ministry of CIVIL AVIATION ( SHRI K. C. VENUGOPAL )
(a): The details of ruoutes economics of Air India for the last three years are as
under:-
Sl. No. Routes No. of Services 2010-11 2011-12 2012-13
1. Services not meeting cash cost 178 137 78
2. Services meeting cash cost but not 81 57 109 meeting total cost
3. Services meeting total cost 10 01 14 Total 269 195 201
(b) the details of the income generated and the expenditure incurred by Air India during each
of the last three years and the reasons for increasing losses are as under:
Sl.No. Particulars Ruppees in Crores 2010-11 2011-12 2012-13
1. Total Revenue 14455.98 15901.79 16130.08
2. Total Expenses 23459.48 21319.65 22542.00
The main reasons for the losses are:-
i) Abnormal increase in price of ATF more than three times the year 2000 level and un-favourable
pricing/taxation structure for ATF in India
ii) Increase in depreciation expenditure due to aircraft acquisition
iii) Increase in interest on aircraft loans due to induction of new aircraft fleet and
high infrastructure cost existing at airports
iv) Increase in financing cost on account of increase in interest rates and increase in
working capital borrowings
v) Decrease in ground handling revenue
vi) Depreciation of Rupee against US Dollar
vii) Entry of Low Cost Carriers on domestic and international routes and
viii) Global recession and fall in premium traffic
(c): Yes, Madam. Air India has requested for Government of India`s Guarantee for getting
fresh loans from the Banks.
(d): The Financial Restructuring Plan (FRP) and Turn Around Plan(TAP) of Air India has
been approved by the Goverment on 12.04.2012 under which there would be equity investment
in Air India spread over 10 years. Under FRP the Government has already released
Rs.11,700 crores as equity till 31st August, 2013. Equity infusion by the Goverment is
against achievement of specific milestones in terms of load factors, yield and on-time
performance. Achievements made by Air India vis-a-vis TAP milestones are as Annexed.
(e): No, Madam.
(f): Under the Turn Around Plan approved by the Cabinet, banks have converted short term
loans amounting to Rs.10,500 crores into long term loans. A certain portion of short
term loans amounting to Rs.7400 crores have been paid through the proceeds of
Non-Convertible Debentures(NCD). This has resulted into reduction in the interest.
Besides the above, the Government has taken several steps to turn Air India in to profit
making organisation. Some of the steps taken by the Government are as follows:
i) Discontinuatin of highly loss making routes where there is no probability of
profitability even in remote future.
(ii) elimination of route network including parallel operations
(iii) induction of new fuel efficient aircraft on several domestic and international
routes to increase passenger appeal and reduce operational cost
(iv) enhanced utilisation in new fleet of new aircraft
(v) phasing out of old fleet and consequential reduction in maintenance cost.
(vi) establishment of institutional mechanism to promptly respond to market developments.
