Thursday, February 4, 2010

Minister Group Denies Air India Equity Infusion


Aviation Daily Feb 04 , 2010 , p. 13
Neelam Mathews

Ailing national carrier Air India, operated by the National Aviation Co. of India Ltd. (NACIL), has been refused an infusion of $260 million for 2010-11 by a group of ministers that included Home Minister P. Chidambaram, Law and Justice Minister M. Veerappa Moily and Minister of State for Civil Aviation Praful Patel.

Arvind Jadhav, chairman and managing director, has been tasked with cost cutting and spinning off MRO, cargo and ground-handling departments into separate subsidiaries.

The government had approved $173 million for Air India last month after reviewing its performance for November and December and had set a challenging target of achieving a cost saving of $432 million by March. Air India, which releases limited financial and operating data, posted a net loss of $318 million, a 9.7% improvement from the October-December quarter in 2008.

Air India added 29 new aircraft in 2009, part of an $11 billion order to Boeing and Airbus for 111 aircraft. The government, which earlier said it would keep new prime slots to London Heathrow and Southeast Asia from Delhi to help give its home carrier a boost, did a turnaround by allotting those slots to a private carrier.

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