Burdened by high fuel and labour costs, cash-strapped Air India suffered a net loss of Rs 5,548 crore (Rs 55.48 billion) in 2008-09, as its total revenue declined by around Rs 2,000 crore (Rs 20 billion) compared to the previous fiscal.
The losses came down from Rs 7,200 crore (Rs 72 billion) the airline suffered in 2007-08 to Rs 5,548.26 crore (Rs 55.482 billion) in 2008-09. Total revenue fell to Rs 13,479 crore (Rs 134.79 billion) in FY'09 from Rs 15,252 crore (Rs 152.52 billion) during the previous fiscal.
The Air India board, which met in Chennai on Wednesday, approved the annual accounts for the last fiscal, with the losses and fall in revenue resulting out of the global financial meltdown, low passenger load factors and falling yields.
The airline is facing a strike threat by pilots from November 24 after it proposed to slash incentives and allowances for them and other sections of employees as part of the cost-cutting measures.
A Group of Ministers (GoM), headed by Finance Minister Pranab Mukherjee, would be meeting tomorrow to discuss the financial state of affairs and its restructuring and turnaround plan to take a call on government assistance to the ailing national carrier by way of equity infusion and soft loan.
Faced with the strike threat, Air India on Tuesday released a month's incentives and allowances to its 30,000 employees, as it proposed to scrap the productivity-linked incentives (PLI) for its top managerial cadre, including executive directors.
It is also continuing discussions with the unions of various sections of employees, including pilots and engineers, in a bid to reduce staff costs.
As part of cost-cutting and saving enhancement exercise, the airline this month invited separate bids for leasing out 10 of its aircraft -- six Boeing and four Airbus freighters.
At the board meeting, it was reported that in line with the market trend, the total revenue of Air India declined from Rs 15,252 crore in 2007-08 to Rs 13,479 crore in 2008-09, due to global recession, fall in load factors and passenger yields, a company spokesperson said.
The passenger load factor declined from 63.8 per cent in 2007-08 to 59.5 per cent in 2008-09 and the number of passengers travelling on Air India flights declined from 13.21 million in 2007-08 to 10.36 million in 2008-09, he said.
The global aviation industry body IATA had forecast that losses in the global aviation industry for 2008 would be around $16.8 billion, followed by a loss of $11 billion for 2009 due to a weak revenue environment and increase in operating costs, like fuel and other charges.
