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June 25, 2001
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Money > Business Headlines > Report June 25, 2001 |
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A-I to project Rs 300 million profit in last ditch effort to stall sell-offBS Economy Bureau Even as the Air India board meets on Monday to discuss the national carrier's financial plans for 2001-02, questions are being raised about the validity of its budget projections. Against earlier projections of Rs 1.50 billion losses, the Air India board is now expected to project Rs 300 million profits for the current fiscal at the meeting. The projections have been revised on the basis of a 10 per cent increase in operating revenue upto Rs 54.36 billion during 2001-02 from Rs 49.25 billion last year. The number of flying hours are also expected to increase from 74,000 to 85,000 next year, according to the new proposal. The projections, being made for the airline that has been in the red since 1995-96, is being said to be too optimistic. They are aimed at making a case against divestment of the 40 per cent government stake in the airline, according to a senior Air India official. "With the Hindujas likely to be eliminated from the race due to security reasons and profits being projected for 2001-02, it will be easy for the faction that is opposed to divestment to raise voices against the process more openly," he added, with an obvious reference to Union civil aviation minister Sharad Yadav. Yadav had told Business Standard, last week, that it will be politically difficult for the government to convince Parliament about the transparency of the deal if only one bidder is left in the fray. The government would fetch a higher price if the airline was making profits, he had remarked. Analysts have also expressed doubts about the projections on the surplus. Even after factoring in the expansion in capacity, an abrupt turnaround, as projected, is unachievable due to two factors in particular. "The daily flight from Delhi, introduced by United Airlines since April 2001, and the additional four flights a week, being operated by Cathay Pacific since March have caused a significant drop in A-I's load factors," they say. Powered by YOU MAY ALSO WANT TO READ:
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