Financial Performance of Air India Improves

Financial Performance of Air India Improves

Air India has made substantial improvements in its financial performance. The main areas in which the company has registered improvements in FY 2014-15 in comparison to FY 2011-12 are as follows:

(i) The Operating Loss has consistently reduced since merger and in 2014-15, the same stands at Rs.2636.19 crores as compared to Rs.5138 crores in 2011- 12.

(ii) As per 2014-15, the Net Loss is Rs.5859.91 crores as against the loss of Rs.7559.74 crores in 2011-12 i.e. a reduction by 22.5%.

(iii) The Company has turned EBIDTA positive by Rs.337.77 crores in 2014- 15 as against the negative EBIDTA of Rs.2236.95 crores in 2011-12.

(iv) Total Revenue increased from Rs.14713.81 crores in 2011-12 to Rs.20606.27 crores in 2014-15 i.e. by Rs.5892.46 viz by 40.1% as compare to levels of 2011-12.

Earlier Air India (AI) had been suffering losses over the past few years and the details of the losses for the past 5 years are as follows:

Financial Year           Net Loss (Rs. Crores)

  2010-11                  6865.17

  2011-12                  7559.74

  2012-13                  5490.16

  2013-14                  6279.60

  2014-15                  5859.91

Losses were on account of a multitude of factors which include the following:

(i) High fuel prices

(ii) High interest burden

(iii) Increase in competition especially from low cost carriers

(iv) High Debt Equity Ratio

(v) High Airport User Charges

(vi) Liberalized bilaterals to foreign carriers

(vii)Adverse impact of exchange rate variation due to weakening of the Indian Rupee.

Government took cognizance of the deteriorating financial position of Air India and formulated a Turnaround Plan (TAP)/ Financial Restructuring Plan (FRP) with the aim of improving the operational and financial performance of the company which was approved by the Cabinet Committee on Economic Affairs (CCEA) in its meeting held on 12th April, 2012. The TAP/ FRP envisages the following:

(i) Upfront equity of Rs.6750 cores in FY 2011-12.

(ii) Equity for Cash deficit support of Rs.4,552 crores till FY 2017-18.

(iii)Equity for guaranteed aircraft loan fill FY 2021 of Rs.18,929 crores.

(iv) For GOI guaranteed Non-Convertible Debentures (NCDs) an amount of Rs.11,951 crores towards interest and Rs.7400 crores towards principal. Till date, equity of Rs.22,280 crores has been released to Air India under TAP/FRP.

The TAP/ FRP also provides that equity would be infused subject to achievement of certain laid down milestones. The Company has achieved most of the targets set out in the TAP milestones, and has made progress in both Operational as well as Financial Areas.

This information was given by Minister of State for Civil Aviation, Dr Mahesh Sharma in a   written reply to a question in the Rajya Sabha today.

-Ministry of Civil Aviation, 08-December, 201