New Delhi: Civil Aviation Minister Pusapati Ashok Gajapathi Raju said Thursday that he will discuss Air India’s revival with Prime Minister Narendra Modi.
Speaking to reporters after taking charge at the Rajiv Gandhi Bhavan, the headquarters of the civil aviation ministry here, Gajapati Raju said: “I will discuss Air India’s situation with the Prime Minister. We will have to analyse the reasons for looses; is it competition or something else.”
Air India has recently managed to improve its financial condition by becoming EBITA (earnings before interest, taxes and amortization) positive for the first time but it is far from breaking-even or ushering in profits.
The beleaguered flag carrier has got a new lease of life as the previous government had approved plans for a turnaround in its fortunes with a rehaul in financial and operational efficiency which are known as turnaround (TAP) and financial restructuring plans (FRP).
Currently the airline, which is laden with a cumulative debt of Rs.40,000 crore it incurred over aircraft acquisition and as short-term loans to maintain its operations.
It received a fresh equity infusion of Rs.5,000 crore in the interim budget for 2014-15.
The cash-strapped carrier will be provided a total infusion of around Rs.20,000 crore till 2020-2021 to turn around its operational and financial performance.
According to Gajapati Raju, the government will take complete cognisance of the situation being faced by the cash-strapped sector which has seen airlines and private airport operators bleed in the recent past due to high fuel and interest costs.
“Government will have to look at the total picture being faced by the industry. Civil aviation is a basic infrastructure for the future and is very important,” he said.
Even after a slew of reforms like allowing direct import of jet fuel and participation of foreign airlines in domestic passenger carriers, the industry continues to bleed.
On the controversies surrounding the issue of new airline licenses the minister said: “There are controversies but I would not like to start (talk) about controversies today.”
The new minister has taken over from Ajit Singh.
Hailing from north coastal Andhra, the 62-year-old is the lone representative of the TDP in the Modi cabinet.
Ggajapati Raju has become a central minister on his parliamentary debut. In a political career spanning nearly 35 years, he was elected to the Andhra Pradesh assembly seven times. A member of the TDP politburo, he is considered close to party chief N. Chandrababu Naidu.