Lok Sabha Question No. 698 (UNSTARRED), answered on 2015-12-03
Subject: Restructuring of Air India
Ministry: CIVIL AVIATION
Asked by: P. C. MOHAN

## GOVERNMENT OF INDIA MINISTRY OF CIVIL AVIATION Lok Sabha UNSTARRED QUESTION NO. : 698 (To BIE ANSWERED ON THE 3rd December 2015 )

## RESTRUCTURING OF AIR INDIA

698. SHRI Pc. MCHHAN

Will the Minister of CIVIL AVIATION

.

be pleased to state:-

- ` (a) whether the loss of Indian Air India (AI) and Indian Airlines (IA) has greatly widened after their merger;
- (b) if so, the dletails thereof for the last three years and the reasons therefor;
- (c) whether is under consideration of the Government for demerger of Al and IA and if so, the details thereof;
- (d) the steps taken t0 improve its performance in the com years; ing
- (e) whether Government: has appointed eminent personalities as nonofficial directorrs for  restructuring 0f Air India and if the details thereof; and :
- the time by which the restructuring plan is likely to be undertaken and completed?

## ANSWER

## Minister ol State in the Ministry of CIVIL AVIATION

(Dr Mahesh Sharma)

- (a) and (b) : Madam. Air India has been facing losses since merger on account 0f a rultitude of factors: The details of the losses incurred in the last 3 years are as under : Yes,

Particulars

.

(Rs: In Crores)

.

2012-13

2013-14 2014-15 ` `

Operating Profitl (Loss) .

(3807.15) (3977.89) (2636.19)

Net Profitl(Loss) after Tax

(5490.16) (6279.60) (5859.91)

- (i) High fuel prices in the past:
- (ii) High interest burden:
- (iii) Increase in cornpetition especially from low cost carriers:

.

- (iv)   High Debt Equity Ratio.
- (vi) Competitiori from foreign carriers:
- (vii) Adverse imnpact rate  variation due to weakening 0f the Indian Rupee:

However, in the last: two years there hhas been a gradual improvement in the financial and opperational performance of the company and the Operating/Net Losses have declined.

- (c) : Madai: No,

:

- (d) The Cabinet Committee (CCEA) in its meeting held on 12.04.2012, approved a Turnaround Plan (TAPY Financial Restructuring Plan (FRP) for operational ani financial turnaround of Air India: The TAPIFRP provides equity infusion of Rs.30231 crores 2021 subject to achievement 0f certain milestones a5 laid down in the TAPIFRP The Company has achieved the Targets set out in the TAP milestones; and has made substantial progress in both Operational well as Financial Areas: The following steps have been taken by Al to reduce costs and enhance its operational and financiai performance: upto
- Rationalization @F certain Ioss making routes;
- (iii) Phasing out & grounding of old fleet;
- (ii) Induction Df brand new   aircraft several domestic & international; routes to increase passenger appeal;
- (iv) Establishiment of Integrated Operations Control Center and Hub Control Center in Delhi;
- (vi)Redeployment of staff t0 curb infructuous expenditure;
- (v) Freezing of employment-iri non-operational areas;
- (vii) Closure of overseas offline offices at certain locations;
- (ix) Enhanced utilization of Inew fleet resulting in production of higher seat capacity (ASKM):
- (viii) Critical.analysis of fuel consumption on:all flights by setting up a Fuuel Council and Fuel Mlnager;
- (e) Departmient of Public: Enterprises (DPE) has issued   guidelines for composition of the Board of Directors which, inter-alia; provide for induction of Non-Official Diractors on the Boards of Public Sector Enterprises (PSEs): As per DPE guideiines; Nori-Official Directors are to be drawn from the public men; technocrats; management experts and consuitants and  professional managers in industry and trade with high degree proven ability: Accordingly, Government has appointed Non-Official Directors on the board of Air India: The details of these Non-Official Directors are as follows :

`

| SI No.   | Name                    | Position on Board    | Designation                                                     |
|----------|-------------------------|----------------------|-----------------------------------------------------------------|
| i.       | Shri Gurcharan Das      | Independent Director | Management Consultant Author                                    |
|          | Dr. Prem Vrat           | Independent Director | Pro Chancellor & Professor, ITM University Gurgaon              |
|          | Shri Kk. Nohwar         | Independent Director | Air Marshal (Retd:), PVSM VM                                    |
| iv.      | Dr. Ravindra H: Dholkia | Independent Director | Professor, IIM, Ahmedabad                                       |
| V.       | Ms: Renuka Ramnath      | Independent Director | Founder-Multiples Alternate Asset Management Pvt: Ltds, Mlumbai |

(0) : Does not arise in view Of (e) above: