Ravi said, “There are several factors which are causing losses to Air India - abnormal increase in aviation fuel prices, competition from budget and other airlines, increase in wages and overheads."
He stated that when the interest on working capital and aircraft procurement is added to them, the loss becomes Rs 600 crore as the income is around Rs 1,100 crore and expenses at Rs 1,700 crores.
Ravi also informed that the Group of Ministers will soon submit its recommendation on how to ring in a turnaround and effect a financial restructuring of the carrier soon.
Stating that Air India has taken a series of measures for reducing costs, “These include rationalisation of certain loss making routes, return of leased aircraft, phasing out of old fleet, reduction in contractual employment and outsourced agencies, fuel savings through critical analysis of fuel consumption, optimisation of aircraft utilisation, closure of foreign stations and offline offices."
Prime Minister Manmohan Singh, had on Aug 3 said in the Lok Sabha that the employees of the carrier will soon be paid their salaries and perks.