Air India Board Okays Airlines 1997-98 Budget

The Air India board yesterday approved the 1997-98 budget of the airline which has projected a Rs 91 crore net profit reversing losses of the past two years.

The meeting did not take up the $3.2 billion medium capacity long range (MCLR) purchase issue which has been hanging fire for the past three years.

Airline managing director Brijesh Kumar said the next meeting of the board may discuss the matter.

He said at a press conference that the anticipated profits were based on an expected operating revenue of Rs 4,189.20 crore, a 20.5 per cent increase over last year, and operating expenses which were only 8.4 per cent more than that of the previous fiscal.

 

The airline recorded a loss of Rs 280 crore during 1996-97 and Rs 270 crore the year before that. Kumar, however, did not explain how the accumulated losses had been adjusted in the current budget to show a profit.

The airline hopes to carry 3.05 million passengers this year against 2.91 million last year through better fleet utilisation, addition of new stations like Seoul and Kathmandu and shutting down uneconomical routes.

The passenger load factor, a crucial indicator of airline health, is expected to average at 69.1 per cent against 65.5 per cent last year, Kumar said. A suggestion to set up a committee to review the financial structure of Air India was mooted at the board meeting of the national carrier here yesterday, a Press Trust of India report said.

The medium capacity long range issue is becoming controversial with the sub-committee of the previous board led by H M Shahul had recommended Airbus A330 as the ideal choice while an airline technical committee had pitched for Boeing 777.

The new board has constituted a sub-committee under Hindustan Aeronautics Ltd (HAL) Chairman R N Sharma to recommend a 50 seater aircraft for Indian Airlines and the MCLR for AI. The new committee is expected to start afresh on the evaluation process.