Cash-strapped Air India’s (AI) troubles are set to increase. Air India Express, its low-cost arm which presently shares 25 per cent of its revenue with the parent, will share only 12.5 per cent from FY 2012-13. “That is a part of the turnaround plan (of Air India). This will improve our financials and our losses will be cut by half, as our losses are primarily because of the revenue share with Air India,” said an Air India Express official, who did not want to be identified, according to a report by Business Standard.
AI Express is estimated to share 430 crore with AI for the current financial year, on revenue of Rs 1,700 crore. Its losses this year are of the same amount as what it gives AI. The parent company earns revenue of Rs 8,000 crore annually and losses on operations are Rs 500 crore per month. AI Express has accumulated losses of Rs 1,105 crore and debt of Rs 3,687 crore, comprising Rs 2,387 crore long-term, for aircraft acquisition, and Rs 1,300 crore of short-term loans. It has an equity base of Rs 30 crore and operates 21 medium-haul Boeing 737-800 aircraft. AI operates 110 aircraft of all kinds. |