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Economy Dec 5, 2012

Air India’s performance has improved, says Ajit Singh

New Delhi: Air India's performance standards have improved and promotions to its employees, which had been stopped recently, will be started from next month, Civil Aviation Minister Ajit Singh told Lok Sabha today.

He said during Question Hour, that though Air India was still suffering losses, its performance has improved and it has returned some of the loans taken from banks. "An oversight committee looks at performance standards of Air India every six months. So far, Air India has improved its performance standards," he said.

Air India is not making profits on most routes and on some it is not even meeting the fuel cost. PTI

The minister stated that most recommendations of Justice Dharmadhikari Committee on integration of erstwhile Air India and Indian Airlines employees have been implemented. "Only promotions were stopped... We will start with the promotions from next month," Singh said, adding a promotion committee has already been constituted.

In reply to a question, the minister said Air India is not making profits on most routes and on some it is not even meeting the fuel cost.

"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," Singh said.

He informed the House that due to improvement in performance, Air India's market share has grown to 20.8 percent. He rued that MPs ask for commercial flights of Air India on routes which are commercially not viable. Singh refused to set a time limit for turning around the airline, saying it is a "continuous process".

Singh said a turnaround plan of the government for Air India is already under implementation. Route rationalisation for all airlines is being done by a committee and Air India has no say in it, he said.

He said salaries of the Air India employees are being paid regularly for the last six months. Asked about the safety of the planes being used, Singh said Air India is second to none at the international level on this issue.

Speaker Meira Kumar requested the minister to look into the issues concerning the official airline. "Air India should be brought back to its original glory," Kumar said, adding that its stock should be restored.

Asked why a civil airport is not being built at Agra which attracts lakhs of tourists every year, Singh said there is a proposal to build a civilian enclave adjacent to the IAF station there. "I have written to the Uttar Pradesh government to allocate more land for this but have received no reply.50-60 acre more land is needed for this. The defence ministry has already given its assent," he said.

On building a bigger airport at Patna, the minister said the state government has to send a proposal and provide land for the purpose.Giving figures of losses suffered by Air India, Singh said it was Rs 5,548.26 crore in 2008-09, Rs 5,552.44 crore in 2009-10, Rs 6,865.17 crore in 2010-11 and Rs 7,853 crore in 2011-12.

The reasons for the loss include increase in aviation turbine fuel, its opaque pricing and VAT, increase in depreciation provision due to aircraft acquisition, high infrastructure cost, global recession and fall in premium traffic, decrease in ground handling revenue.

A task force is examining the route economics to find ways and means to rationalise the routes.
Steps being taken to reduce costs and improve performance include complete route rationalisation of Air India, induction of new aircraft and phasing out old planes, freezing of employment in non-operational areas, relocating executive directors/officers from abroad to India, closure of overseas offline offices at some locations, dismantling of Frankfurt hub and establishment of a hub at Delhi.

PTI

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