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Air-India board discusses strategy to improve position

The Air-India board, which met in Bombay on Wednesday, viewed the financial position of the national carrier with concern following continuous losses, and discussed fresh strategies to improve its performance and yields, according to airline sources.

The sources said the board was shocked at the discrepancies discovered between the financial results for the first quarter of 1997-98 and the projection made by the former managing director Brijesh Kumar in the last meeting.

Against the Rs 84 million projected profit for the first quarter of the year, the financial results presented to the board showed a loss of more than Rs 370 million, the sources said.

The various measures discussed envisaged restructuring the airline's present working capital loan to achieve economy in interest outflow, cutting down on wasteful expenditures, and utilisation of resources for improvement of seat factor and passenger services for increasing yields.

The board also considered a hike in fares to bring the airline's tariff on a par with other international airlines, the sources added.

According to a spokesman of the airline, it had already withdrawn the fare discounts introduced by it last year in the wake of competition from other airlines bringing the airline almost on a par with their existing fares.

The board was also informed about the management's move not to renew the contract of the two wet-leased A-310 aircraft after its expiry on December 31, the spokesman said.

The board meeting remained inconclusive and it would be resumed on Thursday. The issue of the purchase of medium-capacity long-range aircraft did not figure in the meeting, he said.

Joint Chairman of Air-India and Indian Airlines P C Sen attended the meeting.

The board, which is common for both Air India and Indian Airlines would take up the issues of the domestic carrier Indian Airlines on Thursday. The agenda, according to sources, included a review of the progress in the direction of purchasing six 50-seater aircraft for deployment in its fleet for expanding its operations on feeder routes, sources said.

According to the sources, the aircraft shortlisted by the airline were ATR-42, Saab and Dash 8.

When contacted, Sen said the performance of Indian Airlines was constantly looking up and it had posted a profit of more than Rs 90 million in the first quarter of the current financial year.

The airline has projected a profit of Rs 1 billion in the current financial year 1997-98, he added.