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Indian airlines: The big winners and losers in 2013

July 07, 2014 17:00 IST

Indian airlines: The big winners and losers in 2013

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Almost all Indian airlines, barring Jet Airways, IndiGo and GoAir, suffered losses in 2012-13 with Air India suffering the highest loss of Rs 5,490 crore (Rs 54.90 billion), Lok Sabha was informed on Monday.

While no-frill carrier SpiceJet registered a loss of Rs 2,798.2 crore (Rs 27.98 billion) in 2012-13, Jet's low-cost subsidiary JetLite recorded a loss of Rs 2,468 crore (Rs 24.68 billion), Minister of State for Civil Aviation G M Siddeshwara said in reply to a question.

Low-cost airline IndiGo earned a profit of Rs 7,958 crore (Rs 79.58 billion) while GoAir recorded a profit of Rs 851 crore (Rs 8.51 billion), he said.   

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Image: Air India has suffered highest loss of Rs 5,490 crore in 2012-13.
Photographs: Reuters

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A major reason for the losses was the changing air transport environment dictated by the global economic scenario, forcing airlines to seek structural adjustments in order to survive, Siddeshwara said.

In India, important causes include the high and growing debt burden, higher operating costs, huge taxation on fuel, high airport charges and maintenance costs which were afflicting the airline industry, he said.

Air India's provisional losses in 2013-14 stood at Rs 5,389 crore (Rs 53.89 billion), as the government was taking a number of measures to beef up its financial position, Civil Aviation Minister Ashok Gajapathi Raju said in reply to another question.  

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Image: Indian carriers are concerned about growing debt burden and huge taxation on fuel.
Photographs: Reuters

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The measures included upfront equity infusion of Rs 6,750 crore (Rs 67.50 billion), equity for cash deficit support of Rs 4,552 crore (Rs 45.52 billion) till 2017-18 and equity for already guaranteed aircraft loan of Rs 18,929 crore (Rs 189.29 billion) till financial year 2021.

Another amount of Rs 7,400 crore (Rs 74 billion) was being paid to Air India as government guarantee for repayment of principal amount and interest payment on non-convertible debentures proposed to be issued by the airline to financial institutions, banks and the Life Insurance Corporation.

Maintaining that salary payments had not been stopped in Air India, Raju also said the employees had been paid salaries till May this year and ad hoc or flying allowances till April. 

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Image: Air India will have to improve performance in order to get financial support from the government.
Photographs: Mansi Thapliyal/Reuters

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With the national carrier formally joining Star Alliance on July 11, the Minister said Air India's passenger revenue was expected to grow by 3-5 per cent on this count.

To another question, Raju said two more airlines have recently been granted the initial No Objection Certificate (NOC) by the Ministry to start scheduled regional services.

The airlines are Air Carnival for the Southern region and Zav Airways for Northeast and Eastern region, he said, adding that regional airline services needed to be supported by states as they promoted regional connectivity.  

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Image: Air India is all set to join the Star Alliance on July 11.
Photographs: Vivek Prakash/Reuters

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