*Source: DTN News / Bloomberg By Vipin V. Nair
(NSI News Source Info) NEW DELHI, India - August 8, 2009: Air India, the state-run carrier with $1.5 billion of accumulated losses, said it will 
create four business units, slash capacity and pay debt to turn profitable in three years.
Cargo, engineering services, ground handling and airline operations will be separate divisions, Chairman and Managing Director Arvind Jadhav said today in New Delhi. The number of employees will be “rationalized,” he said without elaborating.
Air India, seeking state funds, must reorganize after the government asked it for a “time-bound program” as part of conditions for the rescue package. The carrier delayed June salaries to its 32,000 employees and plans to cancel aircraft orders after traffic slumped and debt mounted.
The cost-saving measures will “be painful,” Jadhav said. “We’ve got into a cash-flow problem. We are unable to service our interest and debt liabilities with our internal resources.”
The focus in the first nine months of the reorganization will be “survival,” Air India said in a statement posted on its Web site. The units will be started in the next nine months and the carrier will aim to turn around in the following 18 months and prepare for an initial public offer.
Leased Aircraft
Air India will return the aircraft that are on lease, Jadhav said. The airline is in talks with Boeing Co. about canceling orders for six 777 planes, spokesman Jitender Bhargava said on July 31.
“We are having a re-look at all the new aircraft,” Jadhav said. “We need to work with the vendors.”
Air India, which has an equity capital of 1.45 billion rupees ($30 million), more than doubled its debt to 152 billion rupees as of June 30 after increasing loans to pay for 49 of the 111 planes ordered from Airbus SAS and Boeing. The carrier had placed orders for 68 planes from Boeing and 43 with Airbus.
The government may give 25 billion rupees of capital to Air India, Civil Aviation Minister Praful Patel said on July 16. The airline will ask banks to defer working capital loans due for repayment, return some leased planes and seek credit extensions from state-run oil retailers on jet-fuel purchases, he said.
National Aviation Co. of India Ltd., Air India’s parent, had asked for a loan of 27.5 billion rupees and equity infusion of 12.31 billion rupees in the year ended March 31 from the government.
To contact the reporter on this story: Vipin V. Nair in Mumbai at vnair12@bloomberg.net
create four business units, slash capacity and pay debt to turn profitable in three years.
Cargo, engineering services, ground handling and airline operations will be separate divisions, Chairman and Managing Director Arvind Jadhav said today in New Delhi. The number of employees will be “rationalized,” he said without elaborating.
Air India, seeking state funds, must reorganize after the government asked it for a “time-bound program” as part of conditions for the rescue package. The carrier delayed June salaries to its 32,000 employees and plans to cancel aircraft orders after traffic slumped and debt mounted.
The cost-saving measures will “be painful,” Jadhav said. “We’ve got into a cash-flow problem. We are unable to service our interest and debt liabilities with our internal resources.”
The focus in the first nine months of the reorganization will be “survival,” Air India said in a statement posted on its Web site. The units will be started in the next nine months and the carrier will aim to turn around in the following 18 months and prepare for an initial public offer.
Leased Aircraft
Air India will return the aircraft that are on lease, Jadhav said. The airline is in talks with Boeing Co. about canceling orders for six 777 planes, spokesman Jitender Bhargava said on July 31.
“We are having a re-look at all the new aircraft,” Jadhav said. “We need to work with the vendors.”
Air India, which has an equity capital of 1.45 billion rupees ($30 million), more than doubled its debt to 152 billion rupees as of June 30 after increasing loans to pay for 49 of the 111 planes ordered from Airbus SAS and Boeing. The carrier had placed orders for 68 planes from Boeing and 43 with Airbus.
The government may give 25 billion rupees of capital to Air India, Civil Aviation Minister Praful Patel said on July 16. The airline will ask banks to defer working capital loans due for repayment, return some leased planes and seek credit extensions from state-run oil retailers on jet-fuel purchases, he said.
National Aviation Co. of India Ltd., Air India’s parent, had asked for a loan of 27.5 billion rupees and equity infusion of 12.31 billion rupees in the year ended March 31 from the government.
To contact the reporter on this story: Vipin V. Nair in Mumbai at vnair12@bloomberg.net
No comments:
Post a Comment