Cash-strapped Air India will have to raise Rs 8,165 crore (Rs 81.65 billion) out of its own resources or borrowings to fund its fleet acquisition programme as the Union Budget focused primarily on aviation infrastructure development, giving a total budgetary support of Rs 190 crore (Rs 1.9 billion).
The Board for Reconstruction of Public Sector Enterprises wants to examine the grave financial problems of Air India, but neither the Civil Aviation Ministry nor the national carrier has responded to the BRPSE offer.
With no equity infusion from the government in sight and the company posting losses to the tune of Rs 2,154 crore (Rs 21.54 billion) in FY'08, the National Aviation Company of India (NACIL) has tightened its purse-strings.
Fourteen unions representing over 30,000 employees of the National Aviation Company Ltd have threatened to go on strike in Mumbai from Tuesday to oppose the government's decision to set up a ground-handling services joint venture with Singapore Airport Terminal Services (Sats).
The board meeting of the state-owned airlines was also attended by Arvind Jadhav, for the first time since he took over as Nacil CMD after the sudden exit of erstwhile chairman Raghu Menon from the company. However, sources in the company said no final decision could be taken as the issue would be discussed with the new government and the civil aviation ministry.
The government has not taken any decision on the communications ministry's proposal for appointing the next chairman of the Telecom Regulatory Authority of India.
The airline had made a three-year turnaround plan in 2009-10.
Air India had planned to launch the service in October but had to defer it as two of its cargo aircraft had to be sent for mandatory checks following an advisory from the Federal Aviation Administration, the official said. These aircraft are expected to join the fleet shortly along with one Airbus A310-200 configured freighter next month, the official said.
The former Indian Airlines pilot won a good deal for colleagues protesting a pay cut; but others question whether the victory was good for the airline.
Launch on 10 sectors in the winter schedule.
The National Aviation Company of India Ltd, that runs the government's flagship carrier Air India, has formally begun looking for a chief operating officer to steer the airline as part of its restructuring plan.
Air India, having run up losses of Rs 7,200 crore and adding about Rs 15 crore worth of red ink every twenty-four hours, is now asking for even more money to burn from the Government of India.
In fact, almost the entire increase in the allocation for the civil aviation ministry was cornered by the National Aviation Company of India Limited; it was earmarked Rs 8,165.64 crore as against the revised estimate of Rs 4,136.89 crore for 2008-09. The ministry received a total allocation of Rs 12,164.76 crore, compared with the revised 2008-09 estimate of Rs 7,490.06 crore, a hike of almost Rs 4,675 crore.
Heeding to workers' demands, state-run Air India on Tuesday decided to pay the wages and salaries of its employees on the July 14 and to the contractual staff on July 10.
NACIL will meet all of its proposed investment from the internal and extra budgetary resources, the Budget documents presented in the Parliament today showed. The company had invested Rs 4,136.89 crore in 2008-09. Of the total Plan outlay of Rs 12,164.76 crore for the ministry of civil aviation, the government announced budgetary support of Rs 190 crore for the sector.
When National Aviation Company of India's wage bill is described as impossible to sustain, the unions say it is due in large part to the salaries paid to the same brass which wants pay cuts, apart from other creamy layers such as pilots and engineers, who get quite a bit through productivity-linked incentives. Hence, say the unions, it is these sections which need to take the hit in salaries, not their members.
National Aviation Company of India Limited, the public sector entity that owns Air India, will be offering a voluntary leave-without-pay scheme to 15,000 employees--around 46 per cent of its staff strength--to help the financially-strapped airline save over Rs 75 crore annually.
"I recently flew on one of our aircraft and I was pleasantly surprised. Our aeroplanes are brand new and a pleasure to travel on. They can give any airline a run for their money," says Raghu Menon.
A proposed strike by almost all sections of Air India employees next Tuesday on various demands, including implementation of agreements relating to wages and cadre policy, has been declared illegal.After a meeting on Saturday, top officials of the Civil Aviation Ministry and the National Aviation Company of India Limited (NACIL), which runs Air India, decided to "take serious view" if the employees went ahead with their threat, official sources said.
"We have successfully carried out the 'C check' on two of our B-777 aircraft and work on the third one is expected to be completed within a month," National Aviation Company of India Ltd (NACIL) SBU-Head (Engineering), K M Unni, told media persons in Mumbai.
Raghu Menon, CMD of National Aviation Company of India (Nacil), had said last year that more than 70 per cent of the merger process would be completed by the end of FY09.
The Aviation Industry Employees Guild will file a petition in the Bombay high court this week against a decision by the National Aviation Company to cut daily outstation and tour allowances within India by 50 per cent. Nacil was formed after merging Indian Airlines and Air India last year.
The National Aviation Company of India (NACIL), the entity that came into being after the merger of national carriers Air India and Indian, has increased its working capital limit to around Rs 9,500 crore (Rs 95 billion) in order to meet the recent hikes in fuel prices.
Raghu Menon, special secretary and financial advisor in the civil aviation ministry, has been appointed the chairman and managing director of Air India, ending weeks of speculation over the issue.The Appointments Committee of the Cabinet approved the name of Menon, a 1974 batch IAS officer of the Assam-Nagaland cadre, after a keen race for the top job in the National Aviation Company of India Limited (NACIL), which runs the merged national carrier.
National Aviation Company, the name of the proposed merged entity of Air India and Indian Airlines, plans to launch a value carrier to take on the challenge from JetLite and Air Deccan.
The NACIL raised $1 billion through External Commercial Borrowings(ECBs) to get aircraft on lease and hire-purchase basis, according to a data released by the Reserve Bank on Wednesday. The debt raised by NACIL under the approval route will have to be repaid over a period of 13 years and three months.
Each aircraft will cost about $50 million and the purchase is being funded by the US-based Exim Bank. The airline operates 143 flights a week from Indian cities to 12 destinations in the Far East and West Asian countries. In its fourth year of operation, the international budget carrier now has 11 fully owned aircraft, while seven are on lease, which will expire in 2010.
In its petition, the association alleged that the procedure followed by the Union Government for the merger was not proper and was illegal. A new company, National Aviation Company of India Ltd was incorporated in March this year as promoter of the new brand and the merger would take two years to become effective.
Sources close to the development reveal that after hectic negotiations and several rounds of meetings, the choice of brand was a unanimous one.
The government is in the process of structuring a uniform performance-linked incentive scheme for Air India and Indian Airlines employees after the merger of the two airlines.
ED has submitted a chart of total $60.54 million received by the firms directly or indirectly owned by Talwar between April 23, 2008 to February 6, 2009.
The NCP leader said that he will be happy to cooperate with the ED so that the agency understands the "complexities" of the aviation sector.
Minister of State for Civil Aviation Jayant Sinha emphasised that the brand name has both sentimental and economical value.
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