According to the economic survey - Air India is likely to come out of its precarious financial position this financial year with a positive cash flow, as its performance has improved considerably.
Strategy to cover losses:-
· Air India had taken several initiatives to cut costs and enhance revenues like route rationalisation, phasing out and grounding of old fleet, freezing of employment in non-operational areas, leveraging assets of the company to increase MRO (maintenance, repair and overhaul) revenue and revenue from the company's real estate properties.
· As part of its Turnaround Plan, the airline had also initiated measures to operationalise subsidiary companies in ground handling and MRO and transferring manpower and equipment to them to make them independent profit centres.
· Apart from leasing its headquarters building in Mumbai, cash-strapped Air India has identified some more properties to monetize those in order to raise Rs 5,000 crore as part of its turn around and financial restructuring plan.
· Air India has identified land at Chennai, Coimbatore and Kolkata, residential plot at DLF Phase-III Gurgaon, a residential apartment in Kolkata and four unoccupied flats in Mumbai.
· The airline has leased four floors of its headquarters building at Nariman Point on an annual rent of Rs 14.4 crore. Air India is required to monetize its assets in India and abroad to raise Rs 5,000 crore over a period of 10 years, as per the TAP and FRP.Singh also told the House that the national carrier has managed to earn an additional passenger revenue of Rs 680.13 crores and reduced its cash losses by Rs 1,125.50 crores as compared to the corresponding period (between April and December) of the last fiscal.
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