The country’s only public sector commercial airline, Air India, has been suering from a heavy financial burden. The airliner saw its divestment programme, in which the government was expected to retain a part stake, fail last year.However,the company is all set to witness a second attempt at divestment.
The company’s Chairman and Managing Director Ashwani Lohani explains to Furquan Moharkan of DH how the debt (Rs 58, 352 crore) has become a monster for the public sector aviation behemoth. Edited excerpts: Your specialisation has been turning around loss-making companies. When do you think, you can turn around AI? Considering the severe financial constraints that we have been facing, I am satisfied. We are, however, looking at disinvestment. So the focus at present is running the organisation well and enhancing its value by increasing the flying hours of the aircra. We are introducing many new flights – both domestic and international – but with the same fleet. This would increase our revenue from the existing inventory. You talked about financial constraints. Is it debt? Our problem is the huge debt. Minus the debt,the airline can be turned around, provided the working is not hampered by the inherent constraints of the government way of working. Yes,the massive debt is a major problem. The only way to reduce debt is to earn more operating profits than the debt servicing amount. Your cash flow is critical. Does that bother you? Yes, cash flow is an issue for us. It is so because of the huge gap between the total income and the total cost of the company. AirIndia lost Rs 15 crore on an average each day. With thin margins, how long do you think it is sustainable?