Govt says Air India to shave off around 40% of its losses

National carrier Air India is expected to shave off its losses by around 40% to Rs 3,529.80 crore for this fiscal even as its borrowings stood at over Rs 51,000 crore in the previous financial year, government said today.

Till date, the government has pumped in Rs 22,280 crore into the airline, which is expected to report operating profit to the tune of Rs 6.20 crore in this fiscal, Minister of State for Civil Aviation Mahesh Sharma said in a written reply.

The government owned airline had in the fiscal ended March 31, 2015, reported a net loss of Rs 5,859.91 crore, Sharma said.

The Minister said that Air India has been suffering losses for the past many years due to several factors including adverse impact of exchange rate variations due to weakening of Indian rupee, high interest burden, increase in competition especially the low-cost carriers and high debt-equity ratio.

Air India was provided a Rs 30,231 crore lifeline by the parent, Indian government, in 2012 under a turnaround plan, stretching over period of nine years to keep it afloat.

However, the package came with some specific riders.

"Air India has a total debt burden of Rs 51,367.07 crore as on March 31, 2015. This amount includes Rs 22,574.09 crore outstanding on account of aircraft loans and the balance he said.

According to the turnaround plan, the equity infusion also includes Rs 18,929 crore for the repayment of the government-guaranteed loans/interests till FY 2020/21, he said.

In response to another question, Sharma said Air India has forwarded a proposal, seeking issue of government-guarantee of Rs 10,000 crore, against which tax free bond would be issued by the airline.

Replying to a question on total equity infusion in the carrier by the government as part of the 2012 bailout package, the Minister said Air India has till date received Rs 22,280 crore including Rs 3,300 crore in the last fiscal.