Proving wrong the sceptics who think the Government has no option but to sell Air India, the national carrier’s net loss after tax has narrowed to Rs 3,643 crore and operating profit risen to Rs 300 crore in the financial year 2016-17.
The airline had posted a net loss after tax of Rs 3,836.77 crore and an operating profit of Rs 105 crore in 2015-16 fiscal, Minister of State for Civil Aviation Jayant Sinha informed the Rajya Sabha on Tuesday.
The airline saw its total revenue, including exceptional and extraordinary items, increase to Rs 22,146 crore in 2016 -17 period. The total revenue stood at Rs 20,524.56 crore in the year-ago period.
However, the airline’s expenditure went up to Rs 25,789 crore in the last financial year, as compared in 2015-16 which was at Rs 24,361.33 crore. Sinha was responding to various queries related to the airline. Citing provisional figures, Sinha said Air India’s total debt stood at Rs 48,876.81 crore at the end of March 2017.
“Air India is facing financial pressure and earning less profit due to high debt burden as an offshoot of past accumulated losses. The debt servicing is at around Rs 6,000 crore per annum,” the Minister said.
To a query on whether Air India is facing financial pressure due to laxity in operation and management of the airline, Sinha replied negatively. “To implement the decision of the CCEA, appointment of transaction adviser, legal adviser and asset valuer shall be taken up as per terms and conditions and scope of work of advisers/valuer in accordance with the model RFPs (Request for Proposals) suggested by the Department of Investment and Public Asset Management,” Sinha said.
Noting that liquidity constraints continue to impact the airline’s smooth functioning, he said the company has been making constant efforts for substituting its high cost working capital loans with long term low cost debt.
“Air India has been in consultation with various banks so that the interest costs can come down substantially in the coming years to improve its profits,” the Minister added. According to Sinha, the number of contractual staff of Air India increased in operational categories in the last one year. As per the figures, the number of contractual staff rose to 2,636 as on April 1, 2017 compared to 1,740 at the same period a year ago.
On the other hand Air India CMD Ashwani lohani assured the employees their interests would be “safeguarded” as he sought to allay concerns over possible layoff following the Government’s decision to sell its stake in the national carrier. “I would like to reassure all my employees that during the process of disinvestment, the Government and the airline management would like to safeguard your genuine and valid interests and ensure that suitable measures to this effect are put in place,” lohani, said in a letter to the staff.