Air India earns Rs 36 cr a day, spends Rs 57 cr!

Explaining the precarious financial health of India's flag carrier, the government on Wednesday said Air India earns Rs 36 crore (Rs 360 million) a day from its operations while it spends about Rs 57 crore (Rs 570 million).

"We are making a compulsory payment abroad of Rs 16 crore (Rs 160 million) and committed payment here in India is Rs 20 crore (Rs 200 million). But the total expenditure comes to about Rs 57 crore (Rs 570 million)," Civil Aviation Minister Vayalar Ravi said in Lok Sabha during the Question Hour.

Air India is facing a major problem of payment overdues for aviation fuel to oil companies. The overdues to oil PSUs have soared to over Rs 2,280 crore (Rs 22.80 billion) as on February this year.

"The government has infused Rs 1,200 crore (Rs 12 billion), out of this, we have given Rs 475 crore (Rs 4.75 billion) to the oil companies. As it is, it is true that Rs 1,900 crore (Rs 19 billion) is still pending."

Besides, an amount of Rs 12.5 crore (Rs 125 million) is being paid daily by Air India to oil companies on cash and carry basis.

Till date Air India has paid 1,147.5 crore (Rs 11.47 billion) under this scheme. Ravi said that the oil companies were not at all yielding to government's requests of any concession.

They (oil PSUs) have extended the credit facility to all the private airlines but not to Air India.

"We are requesting that Air India must get the treatment which is being extended to the private companies," Ravi said.

Asked whether the government is considering measures to ensure that private airlines cover all the Indian sectors in an appropriate manner to increase aviation connectivity, he said Route Dispersal Guidelines have been laid down with a view to achieve better regulation of air transport services covering various regions in the country.

"It is, however, up to the airlines to provide air services to specific places depending upon the traffic demand and commercial viability. Airlines are free to operate anywhere in the country subject to compliance of the Route Dispersal Guidelines issued by the government," Ravi said.