Author: Karma Paljor
Publication: IBNLive.com
Date: May 05, 2011
URL: http://ibnlive.in.com/news/govt-pushes-air-india-into-financial-mess-cag/151374-7.html
Air India pilots are on strike as a fallout
of the merger of Air India and Indian Airlines.
While Air India today staring at a loss of
over Rs 13,000 crore and the management is struggling to operate daily services,
the Civil Aviation Ministry could have saved the national career from this
mess.
The Comptroller and Auditor General of India
(CAG) believes Air India incurred Rs 10,000 crore loss because it was forced
into buying 111 aircraft it did not need.
A CAG report on aircraft acquisition says
the mega acquisition is the main reason why the Maharaja is in deep financial
mess.
CNN-IBN has accessed the entire CAG report
on the state of Air India and Indian Airlines. The two airlines merged in
2007.
The report, to be tabled in Parliament, indicts
the Civil Aviation Ministry for forcing the multi billion dollar aircraft
acquisition. The loss from the forced aircraft acquisition resulted into a
loss of Rs 10,000 crore.
According to the CAG report the proposal to
buy 43 aircraft for Indian Airlines in 2005 was done without adequate due
diligence regarding the economic viability.
The induction plan was based on a study done
in the 90's and hence not up-to-date, but the Civil aviation Ministry went
ahead the ministry despite warnings by the Planning Commission and its own
financial advisor.
Manufacturer Airbus was to invest $100 million
after the deal for maintenance and repair, but the fact was missing in the
final agreement.
The airline failed to synchronise lease periods
of aircraft with the delivery of new aircraft leading to a further loss of
Rs 1,372 crore.
The CAG report says the decision was earlier
for a mix of aircraft, Airbus and Boeing, which was later converted to an
all Boeing fleet in favour of the Americans.
Air India proposed to buy 28 aircraft, but
Civil Aviation Ministry increased the number to 68 despite the national career's
opposition.
The logic given was that this will help Air
India improve market share from 19 per cent to 30 per cent, and that did not
happen.
The deal was done despite government evaluating
agencies saying that this push Air India into a deeper financial mess.
All such faulty decisions led to a loss of
10,000 crore and the current situation that the airline is now in.
Meanwhile, the BJP has hit out at the Government
for the mess in Air India and party chief Nitin Gadkari on Thursday urged
the Public Accounts Committee (PAC) to take up the CAG report on Air India.
"I request new Chairmen of PAC Dr Murli
Manohar Joshi to highlight the CAG report on Air India," said Gadkari.
