August 22, 2012
Air India has lost more than 280 billion rupees ($5 billion) since its 2007 merger with Indian Airlines and 78.5 billion rupees in its previous fiscal year, the Indian government says.
Despite these losses, though, the beleaguered airline this year expects to break even and save on maintenance and other costs by selling and leasing back several of its long haul aircraft from international lenders.
Air India expects to receive its first Boeing 787 aircraft by month’s end after a more than four-year delay.
“Air India plans to enter into a sale and lease back agreement of the 27 787 aircraft, besides Boeing 777 and 747, to generate revenue and sustain the airline,” a civil aviation ministry official says.
Air India ordered 27 787s in 2006 as part of a 68-aircraft deal, and deliveries were set for May 2008 before Boeing instituted a series of delays. All the aircraft are now set to be delivered by March 2016.
The airline’s fleet renewal is part of a restructuring that also includes steps to rationalize the carrier’s network, says Civil Aviation Minister Ajit Singh. He adds that the state-owned airline may also return leased before their contracts expire.
Only 16 of Air India’s 184 flights between April and June broke even, Singh notes.
The airline has been drowning in debt since its merger with Indian Airlines; the merged entity’s current debt is nearly 440 billion rupees.
Prior to the merger, Air India posted a profit of 651.4 million rupees in fiscal 2005 and 124.3 million rupees the following year. During the same periods, Indian Airlines registered profits of 716.1 million rupees and 630 million rupees, government figures show.