New Delhi: Burdened by high fuel and labour
costs, cash-strapped Air India suffered a net loss of Rs 5,548
crore in 2008-09, as its total revenue declined by around Rs
2,000 crore compared to the previous fiscal.
The losses came down from Rs 7,200 crore the airline
suffered in 2007-08 to Rs 5,548.26 crore in 2008-09. Total
revenue fell to Rs 13,479 crore in FY'09 from Rs 15,252 crore
during the previous fiscal.
The Air India board, which met in Chennai today, approved
the annual accounts for the last fiscal, with the losses and
fall in revenue resulting out of the global financial
meltdown, low passenger load factors and falling yields.
The airline is facing a strike threat by pilots from
November 24 after it proposed to slash incentives and
allowances for them and other sections of employees as part of
the cost-cutting measures.
A Group of Ministers (GoM), headed by Finance Minister
Pranab Mukherjee, would be meeting tomorrow to discuss the
financial state of affairs and its restructuring and
turnaround plan to take a call on government assistance to the
ailing national carrier by way of equity infusion and soft
loan.
Faced with the strike threat, Air India yesterday
released a month's incentives and allowances to its 30,000
employees, as it proposed to scrap the productivity-linked
incentives (PLI) for its top managerial cadre, including
executive directors.
It is also continuing discussions with the unions of
various sections of employees, including pilots and engineers,
in a bid to reduce staff costs.
As part of cost-cutting and saving enhancement exercise,
the airline this month invited separate bids for leasing out
10 of its aircraft -- six Boeing and four Airbus freighters.
At the Board meeting, it was reported that in line with
the market trend, the total revenue of Air India declined from
Rs 15,252 crore in 2007-08 to Rs 13,479 crore in 2008-09, due
to global recession, fall in load factors and passenger
yields, a company spokesperson said.
The passenger load factor declined from 63.8 per cent in
2007-08 to 59.5 per cent in 2008-09 and the number of
passengers travelling on Air India flights declined from 13.21
million in 2007-08 to 10.36 million in 2008-09, he said.
The global aviation industry body IATA had forecast that
losses in the global aviation industry for 2008 would be
around USD 16.8 billion, followed by a loss of USD 11 billion
for 2009 due to a weak revenue environment and increase in
operating costs, like fuel and other charges.
The spokesperson said Air India has identified Booz &
Allen consultants to look at cost-cuts across the board for
effecting savings.
Among the major factors contributing to its losses is
the high fuel costs in 2008-09 when ATF prices touched a peak
of USD 147 per barrel. The airline had to cough up a whopping
fuel bill of about Rs 6,200 crore in 2007-08.
With the induction of a large number of 111-plane order
from Boeing and Airbus, its depreciation costs have also
risen significantly, along with the heavy interest burden on
aircraft loans and borrowings.
As most of the payments made by the airlines are in
dollar terms, either for aircraft or their repairs or even for
payment of over 150 expatriate pilots on its rolls, Air India
suffered losses due to the depreciating value of the rupee.
The national carrier is in the process of implementing
a series of measures to reduce costs and would be presenting a
roadmap before the Group of Ministers (GoM) here tomorrow for
improving its financial health.
The government has made it clear that it would not give a
blank cheque to AI and would release funds only when come
concrete measures to reduce financial costs are implemented.
Bureau Report