Eight Members of Parliament, in a written question, asked the Ministry of Civil Aviation, “whether it has been revealed that Air India has suffered...
huge losses due to the misuse of its resources, if so, the details thereof; whether the former ex-officers of Air India were grossly neglected in foreign deployment, if so, the details thereof; whether over staffing in Air India is affecting its efficiency and profit and if so, the steps taken to tackle this issue; whether the Air India has sought huge amount of loan to meet its immediate capital requirements and if so, the details thereof indicating various loans on Air India as on date; whether some private airlines have expressed their interest to operate International flights of Air India, if so, the details thereof; and the other steps taken/being taken by the Government for revival/turnaround of Air India and clear its huge debt burden?”
Minister of State (MoS) Civil Aviation Jayant Sinha, in his response, said, “The total outstanding loans on Air India as on 30.09.2017 (Provisional) is Rs. 51,890 crore.” Of the total amount, Rs. 18, 364 crore was for aircraft loans and Rs. 33,526 crore was for working capital loans. While the losses incurred by the national airlines has reduced since FY 2013-14, it still remains significant. In 2013-14, Air India made losses worth Rs. 6,279.60 crore. The loss figure came down to Rs. 5,859.91 crore in 2014-15 and further down to Rs. 3836.77 crore in 2015-16. In 2016-17, the figure marginally dropped to Rs. 3643 crore in 2016-17. One way out of this crisis facing the national carrier is disinvestment. In July this year, the Cabinet Committee on Economic Affairs (CCEA) had given in-principle approval for considering strategic disinvestment of Air India and its five subsidiaries.
The government has also made it clear that there is no proposal to reconsider the decision to privatize Air India. To revive the loss-making national carrier, the government is working on the modalities for its strategic disinvestment. To a question in the Lok Sabha on whether the government proposes to reconsider its decision to sell out the debt-ridden Air India and its auxiliary companies, minister of state for civil aviation Jayant Sinha replied in the negative.
In 2016-17, the airline had a net loss of Rs3,643 crore, while operating profit rose to Rs215 crore, the provisional figures showed. The government also informed Parliament that there had been a ban on direct recruitment in Air India for non- operational categories of employees and that the total number of regular employees of Air India as on November 2017, is approximately 14,006 down from approximately 32,600 at the time of its merger in August 2007.
The government has also made it does not want Air India to become defunct like the Kingfisher Airlines, promoted by embattled liquor baron Vijay Mallya, and wants it to serve the nation. This was stated by Civil Aviation Minister Ashok Gajapathi Raju. The government does not want anyone working in Air India to lose job, Raju said in the Lok Sabha, adding that the disinvestment process of the national carrier has been initiated. "Nobody wants anyone to become unemployed. We don't want Air India to go the Kingfisher (Airlines) way. We want the Air India to serve the nation, to serve the people and fly high," he said during the Question Hour.
The minister said a ministerial committee headed by Finance Minister Arun Jaitley is looking into the matter of disinvestment of Air India and anyone, including MPs, are welcome to give their suggestions to this panel.
On June 28, the Union Cabinet had cleared disinvestment of debt-laden Air India but the final modalities, including the quantum of stake sale, would be decided by a group of ministers headed by the finance minister.
Surviving on taxpayers' money, Air India has been in the red for long and various proposals, including government think-tank Niti Aayog's recommendation for complete privatisation, have been made.
The Kingfisher Airlines was established in 2003 by Mallya. The air carrier was suspended by the Directorate General of Civil Aviation after it failed to address the regulator's concerns about its operations.
Kingfisher Airlines also defaulted on loans from various Indian banks amounting to Rs 9,000 crore. Mallya left the country for the UK after failing to repay the debt.