NACIL expected to register loss of Rs 5,000 cr

The National Aviation Company of India (NACIL), formed in 2007 with the merger of Air India and Indian Airlines, was expected to register a loss of around Rs 5,000 crore in the last fiscal, the government today said.

"NACIL expects to register a loss of about Rs 5,000 crore in 2008-09," Civil Aviation Minister Praful Patel said while replying to a query in Rajya Sabha.

Citing global downturn and  rising oil prices as the main reasons for the losses, Patel said, "The losses have been largely due to operating losses, which have been compounded due to the present economic recession as also the high oil prices last year and the debt servicing on new aircraft."

The Minister said that due to NACIL's deteriorating financial position, the company has been advised to formulate its restructuring plan and revisit its proposal for infusion of equity and soft loan from the government.

Meanwhile, replying to another query, Patel said that almost all private airlines were also making losses due to the spiralling aviation turbine fuel (ATF) cost, economic slowdown and the low load factor. Patel said that in a letter to the Prime Minister in June this year, the Airport Corporation Employees Union had mentioned issues such as aircraft acquisition, bilateral rights, over sector capacity induction in domestic sectors and merger of erstwhile Air India and Indian Airlines as the possible causes of the present financial position of the NACIL.

The Civil Aviation Minister said that the leased aircraft fleet of the Air India was also running into losses on some of the routes.  

Patel said that the erstwhile constituents of Air India had placed orders for 111 aircraft, of which 51 have already been delivered.

"Remaining aircraft will be inducted as per the revised delivery schedule," he said.

Patel added that Air India has a fleet of 156 leased and owned aircraft and 12 aircraft were non-operational due to obsolescence of some of its parts.

The Minister said that NACIL was adopting measures to bring down its cost of operations.

He said that the national carrier Air India was taking various measures such as improvement in fuel efficiency, restructuring the networks and schedules and asking the staff to travel in economy class to cut down its operational costs.