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by Devesh Agarwal
As per the budget for fiscal 2013~14, presented yesterday in parliament, the Indian government has earmarked another Rs. 5,000 crore (about $900 million) for equity infusion into ailing national carrier Air India.
This is the second tranche of a nine year, Rs. 30,000 crore (about $ 5.5 billion) tax-payer funded equity infusion, which is part of a turn-around plan for the carrier. The current budget initially provided Rs. 4,000 crore, which has been subsequently increased to Rs. 6,000 crore in the revised estimates. In fiscal 2011~12 the carrier was given Rs. 1,200 core as extra-budgetary support. The budget documents also claim that Air India will additionally generate Rs. 1,318.60 crore through internal and extra budgetary resources in 2013~14.
Civil aviation minister Ajit Singh informed the Indian parliament via a written reply that Air India has turned EBITDA (Earnings Before Interest, Depreciation, Taxes and Amortization) positive of Rs. 48.75 crore between April and December 2012. A drop in the ocean of red, as the carrier had annual losses of Rs 7,853 crore in fiscal 2011~12, has debt exceeding $10 billion, and current operating losses of Rs. 2,554.02 crore for the period from April to December 2012. (Air India has operating revenues of Rs. 11,400.44 crore and operating expenses of Rs. 13,954.47 crore).
The Economic Survey for 2012-13, tabled in Parliament yesterday, claimed that Air India is expected to achieve positive EBITDA in the current fiscal, and the carrier has registered performance improvement such as on-time performance at 85 per cent, passenger load factor at 70.9 per cent and yield at Rs. 4.31 per revenue passenger kilometre during the April~October 2012 period.
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