Air India Performance Improves According to Aviation Minister

Wednesday, 2nd January 2013 at 04:08am

According to Ajit Singh, India's Civil Aviation Minister, the performance of Air India has improved, and the airline is also planning to resume giving promotions to its workers starting January next year.

Although still suffering from its losses, Air India's performance so far has improved, according to the report of the committee that monitors airline. Singh also added that the airline was able to pay some of its loans from different banks.

While most of the recommendations made by the Justice Dharmadhikari Committee regarding the merging of Air India and Indian Airlines employees were already followed, the promotions will only be resumed next month. Singh, nevertheless, claimed that a promotion committee has been formed already for this.

In one question, the minister claimed that Air India is not earning profits from the majority of its routes, and on some, the fuel costs are not even met. In his exact words, "As per provisional Route Economics for April-June, 2012, out of 184 services, only 16 services met the total costs, 99 services did not meet cash cost and 69 services met the cash cost but not the total costs."

He also told the House that as a result of Air India's improved performance, the airline's market share rose to 20.8 percent. He was saddened, though, on MPs' request to produce flights on routes that are not commercially practical. Mr. Singh also talked about the turning around of the airline, which he said was a "continuous process" and therefore does not require a time limit. The turnaround plan is already being executed.

The minister also mentioned about the salaries of the airline's employees, which are now being paid on a regular basis this past six months. When asked regarding the safety of the aircraft being used, he claimed that Air India has no problem in this aspect.

Politician Meira Kumar, meanwhile, has asked the minister to delve into the issues that has rattled Air India. According to her, the airline must be restored back to its former glory.

When asked why an airport is not built in Agra despite being a top tourist destination, Singh clarified that there already are proposals for that, but the Uttar Pradesh government have not yet replied to his request on allocating more land for the airport. The defense ministry, on the other hand, had expressed their agreement for the proposal. Regarding the issue of constructing a larger airport in Patna, Singh said that proposals must be made first and land must be provided for such purpose.

From 2008 up to 2012, Air India's losses sums up to Rs 25,818 crore. The reasons for this are the rising prices of aviation turbine fuels, increased depreciation provision due to the acquisition of new aircraft, infrastructure costs, global recession, and decreased revenues.

Steps being implemented to decrease the losses and improve overall performance of the airline include route rationalization, removal of old aircraft from the fleet and inclusion of new ones, cessation of employment in areas that are non-operational, reassignment of directors and executives from abroad to India, shutting down of some offline offices from overseas locations, establishment of a new hub in Delhi and closing down of the one in Frankfurt.

By: Pete Lee.