Civil Aviation Minister Vayalar Ravi on Thursday said the continuing rise in aviation oil prices, rise in wages and competition from other airlines led to Air India incurring a loss of Rs. 600 crore a month.
“The abnormal increase in aviation fuel prices, competition from budget and other airlines and increase in wages and overheads contributed to the loss,'' he told the Rajya Sabha during question hour.
In addition, the government was paying interest on the working capital and procurement of aircraft. The national carrier's monthly income was around Rs. 1,100 crore and expenses were at Rs. 1,700 crore, the Minister said in reply to supplementaries.
The Group of Ministers, which has met several times in the recent past, would soon submit its recommendation on the airline's turnaround and financial restructuring and accordingly, the government would take steps.
The Minister said Air India had taken a series of measures for reducing cost: rationalisation of loss-making routes, return of leased aircraft, phasing out of old fleet, reduction in contractual employment and outsourced agencies, fuel savings through a critical analysis of consumption, optimisation of aircraft utilisation, and closure of foreign stations and offline offices.
The state-run carrier is in the midst of a serious financial crisis and has failed to pay salaries to its employees for the past two months. Prime Minister Manmohan Singh on Wednesday told the Lok Sabha that wages and appropriate perks would be paid to the employees at the earliest.
