High aviation oil prices, rise in wages and competition from other airlines are causing
state-run Air India to incur Rs 600 crore monthly loss, Civil Aviation Minister
Vayalar Ravi said on Thursday.
"There are several factors which are causing losses to Air India..abnormal increase in aviation fuel prices..Competition from budget and other airlines, increase in wages and overheads," he said during Question Hour in Rajya Sabha (upper house of Parliament).
PARTIAL BREATHER: Govt gives Air India Rs 1,200 cr lift Besides, the government is paying interest on working capital and procurement of aircrafts.
As a result, Air India is incurring Rs 600 crore loss every month as income is around Rs 1,100 crore and expenses at Rs 1,700 crore, the minister said answering supplementaries.
Air India cargo business nosedives He said the Group of Ministers', which has met several times in the recent past, would submit its recommendation on turnaround and financial restructuring of the carrier soon and accordingly, the government would take steps.
The minister also said that Air India has taken a series of measures for reducing costs.
"These include rationalisation of certain loss making routes, return of leased aircraft, phasing out of old fleet, reduction in contractual employment and outsourced agencies, fuel savings through critical analysis of fuel consumption, optimisation of aircraft utilisation, closure of foreign stations and offline offices," he said.
CHANGING FORTUNE: Will a new fleet of Dreamliners help AI? The state-run carrier is in the middle of dire financial crisis and has failed to pay salaries to its employees for the last two months.
Prime Minister Manmohan Singh had on Thursday said in Lok Sabha (lower house of Parliament) that
wages and appropriate perks would be paid to the cash-starved Air India employees at the earliest.
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