Jul. 2, 2009 (The Hindu Business Line) --
New Delhi, July 2
Air India has been facing a financial crunch for the past few years and its borrowings have risen to Rs 15,241 crore in June this year from Rs 6,550 crore in November 2007, the Union Minister for Civil Aviation, Mr Praful Patel, informed the Lok Sabha on Thursday. The huge cost of inducting 111 aircraft at about Rs 45,000 crore and low yields have resulted in the airline reporting a loss of Rs 5,000 crore last year.
The airline has been advised to formulate a concrete proposal for equity induction and provision of loans, Mr Patel said.
The increase in borrowing has been due to a variety of factors, including servicing of debt on account of purchase of new aircraft.
The 111 aircraft include Air India ordering 68 Boeing (NYSE:BA) and Indian Airlines acquiring 43 Airbus aircraft. Last three years, Air India has paid $1,935.5 million for purchase of 24 aircraft while Indian Airlines has purchased 24 aircraft at a cost of Rs 4,738 crore, the Minister said.
The increase in operating losses, the economic recession and the high price of aviation turbine fuel also led to the airline’s borrowings increase, the Minister informed the House.
