Air India losses to come down to Rs 2,636 crore: Govt

National carrier Air India is expected to trim losses by more than half to Rs 2,636 crore in the 2015-16 fiscal as compared to a net loss of Rs 5,859.91 crore in 2014-15, the government said on Thursday.

"With regard to Air India Limited, it is likely to suffer a total net loss of Rs 2,636 crore in 2015-16," said Minister of State for Civil Aviation Mahesh Sharma in a written reply in Lok Sabha.

Sharma said the airline has been facing losses in the past years due to multitude of factors. He said high interest cost and airport charges, increasing competition, particularly from budget carriers, coupled with exchange rate variation due to weakening of Indian rupee are reasons for the carrier's estimated net loss (of Rs 2,636 crore) during 2015-16.

Air India had reported losses of Rs 5,859.91 crore in the fiscal ended March 31, 2015. The national carrier was given a Rs 30,231-crore lifeline by the Finance Ministry in 2012 under a turnaround plan stretching over a period of nine years to keep it afloat.

This equity infusion also includes the financial support towards repayment of principal as well as interest on government-guaranteed loans taken for aircraft acquisition by the airline.

As per the 2012 Turn Around Plan (TAP), the government will infuse Rs 18,929 crore for repayment of government- guaranteed loans/interest till FY 2010-21, Sharma said. The minister also informed the House that till March this year, the government has already infused Rs 22,280 crore into the carrier as part of the bailout package.

Air India has also discharged of all its aircraft loans and interest liabilities by the last fiscal, he said, adding that the government has already approved Rs 1,713 crore equity infusion into the carrier for the current fiscal in line with TAP. 

Responding to a query, Sharma said the carrier has seen a decline in its market share in the last three years, with Air India cornering 16% of the total domestic traffic pie till February against a market share of 18% in the 2014-15 financial year and 19% in the previous year.

"The market share of Air India has declined in the last three years. There has been capacity induction (addition of aircraft) by Air India whereas the capacity of the competitor airlines has grown substantially in the domestic market," he said.

The capacity share of Air India has come down to 15% in the previous fiscal as against 17% capacity deployed by the airline in the fiscal 2014-15, he said. In response to a question, Sharma said Air India had reported as many as 334 delays of more than 15 minutes between April 2015 and March this year due to technical snag in its Dreamliner Boeing 787-800 planes.

These planes have experienced technical issues since induction into Air India fleet. "However, issues do not adversely affect the safety of airplane due to the system design and in-built system redundancy," he said.

"Regular improvements are incorporated as a part of the reliability enhancement process. This is normal process followed as an intrinsic part of maintenance throughout the entire lifespan of aircraft in operations," the minister said.