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India Ministry of Civil Aviation: Air India to Get Another 8 Dreamliners by December

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14-May-2013 The Minister for Civil Aviation , Shri Ajit Singh has said that out of six Dreamliners, two Dreamliners have already been modified for commercial operations and all 6 planes will be ready for operation by the end of this month. While addressing the mediapersons at a press conference here, he said Air India would get another eight Dreamliners by December this year. This will make the total availability of fourteen B-787 Dreamliner aircrafts with Air India by December, 2013. The Minister said that the first commercial flight will restart from 15th May, 2013, for which all operational regulatory requirements have been complied with and all pilots have been subjected to the required checks before release for flight duties. The first international flight is proposed to restart from 22nd May, 2013.Air India proposes to start the following new international routes with these B-787 aircrafts:-

Q Delhi-Birmingham-Delhi w.e.f. August, 2013

Q Delhi-Sydney/Melbourne-Delhi w.e.f. August, 2013

Q Delhi-Rome/Milan-Delhi w.e.f. October, 2013

Q Delhi-Moscow-Delhi w.e.f. early 2014

On the performance of Air India during financial year 2012-13, the Minister said the total revenue during the period has increased by about 9.6% from Rs. 14,714 crores in 2011-12 to Rs. 16,130 crores in 2012-13.Air India carried 14.05 million passengers in the year 2012-13 as against 13.40 million passengers in previous financial year, which shows a growth of about 5%. The net loss of Air India for the financial year 2012-13 has come down by about Rs. 2,261 (Net loss in 2011-12 - Rs. 7,559.74 crores in 2012-13 - Rs. 5,198.55 crores). The EBITDA has improved by 2256 crores over previous year and it stands at Rs. 19.45 crores during the financial year 2012-13 [EBITDA in 2011-12 (-) Rs. 2236.95]. Passenger Loan Factor (PLF) has shown a great upward trend. For the whole network operation, the PLF stood 72.7% during 2012-13 compared to 68% during financial year 2011-12.There is a marked improvement in On- Time Performance ( OTP). The network OTP achieved during financial year 2012-13 has been 77.1% (domestic 80.2% and international 70.8%).

The TAP milestones and actual achievements are as follows:-

Parameters

TAP Benchmark

Actual Achievements

O.T.P.

FY 2013 - 85%

FY 2013 - 77.7%

P.L.F.

FY 2013 - 69.5%

FY 2013 - 72.7%

Yield

FY 2013 - Rs. 3.53

FY 2013 - Rs. 4.25

Air India was able to achieve savings during financial year 2012-13 as under:-

  • Staff cost due to rationalisation of the pay structure - Rs. 243 crores
  • Booking Agency commission - Rs. 118 crores
  • Interest on Loans and Working Capital due to implementation of Financial Restructuring Plan - Rs. 168 crores.

Air India entered into fresh contracts with Oil Companies in January, 2013 which will provide a benefit of Rs. 500 crores annually. Most of the outstanding overdues of Oil Companies are planned to be liquidated by the end of May, 2013. The total revenue is proposed to go from 16,130 crores to 19,393 crores i.e. a jump of 20.2%.The net loss is likely to come down from Rs. 5,198 crores to Rs. 3,989 crores i.e. a reduction of Rs. 1,209 crores. EBITDA is expected to go from 19.45 crores to 1040 crores.

The hiving off of Air India Engineering Services Ltd. (AIESL) and Air India Air Transport Services Ltd. (AIATSL) has begun. The MoU between the parent company and both the subsidiary companies have been signed. The Supreme Court has cleared the hiving off of the subsidiary companies and they will start functioning soon as Independent Units dealing with MRO and Ground Handling businesses.

AIESL has already started attracting third-party business in MRO from domestic as well as international airlines. They have already finalized a tie-up with Go Air and IndiGo airlines for providing MRO services and are in touch with number of other domestic and international airlines for the same.AIATSL has already started contacting various airlines in India and abroad to expand their ground handling business.

Air India Board has approved the implementation of the recommendations of Dharmadhikari Committee and following measures have been taken in this direction:

  • PLI had already been discontinued with effect from July, 2012.
  • Level-mapping, common seniority and pay-fixation of all categories of employees have been finalized.
  • The Government has approved various allowances as per industry standards to the licensed category employees which include Pilots, Engineers and Cabin Crews and Air India is in the process of implementation. Calculations of their total emoluments have also been finalized.

This is a significant achievement and a great success towards integration of both erstwhile Indian Airline and Air India, which was pending for the last 5 years. Moreover, salary upto March, 2013 has been paid to all Air India employees. The allowances to licensed category of employees have been paid up to January, 2013.

Unutilized properties have been identified and are to be disposed off immediately for the purpose of monetization such as vacant lands at Baba Khark Singh Marg in New Delhi, Coimbatore, Chennai, four vacant flats in Mumbai at Sterling Apartments and vacant plot and two vacant apartments in Kolkata. It is expected that monetization of these unutilized assets would generate an additional resource of more than Rs. 1,000 crores for Air India during financial year 2013-14, which will be utilised for repayment of loans. The disposal of these assets would be done through a transparent process of E-Auction under the supervision of an Oversight Committee comprising of a retired Supreme Court Judge, a retired CVC and a retired CAG.