Air India Looks To Government For Loan To Support Turnaround Plan

Aviation Daily Jan 06 , 2011 , p. 14

Neelam Mathews

Cash-strapped, government-owned national carrier Air India is seeking at additional loan for $455 million, Civil Aviation Minister Praful Patel says. This is in addition to the $270 million that was approved recently. Patel said the infusion was being made in tranches to ensure the airline was accountable for its performance. The carrier says it has made improvements across the board. “The results are very encouraging and reflect the commitment of our employees. We have just begun the turnaround journey, and we have a long way to go,” says Arvind Jadhav, chairman and managing director. The International Air Transport Association in September forecast a combined loss of $400 million for Indian carriers in 2010. The airline sector posted a loss of $ 1.7 billion in 2009. Hampering the progress is the ongoing effort to turn the two merged airlines—Air India and Indian Airlines—into subsidiaries, including ground-handling and maintenance, repair and overhaul. The move is being held at bay by employees who are concerned that this is an effort to break them away from the main corporation. While the merger of the two carriers is in theory completed, a common code has not yet been announced. This is the main cause of Air India’s delayed entry into the Star Alliance. The airline registered an overall passenger load factor of 66.3% during April-November 2010, up from 63.1% in the year-ago period. On its international network, the passenger load factor increased to 65% from 62.2%, while on its domestic network, the passenger load factor rose to 70.4% from 66.2%. Air India’s current fleet of 135 aircraft comprises a mix of the Boeing 777s, 747s and Airbus A330s, as well as A321s, A320s, A319s and 737s.