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Thu, Sep 01, 2011

Gov't Official Tells Air India To Tighten Belt

Aviation Minister Calls For Cuts, End To Unprofitable Routes

India's federal Civil Aviation Minister, Vayalar Ravi, called Friday on Air India, which is operated by the national government, to stop flying unprofitable routes and improve its cash flow. The company has lost money since 2007, when it acquired the former Indian Airlines. Ravi blames that in part on a lack of success in realizing synergies, and additional losses caused by a nine-day pilots' strike in May which canceled 40 percent of the airline's flights.

Dow Jones reported comments made by Ravi to reporters Friday. "The 2 billion rupees loss due to the pilots' strike has set back Air India further. It has to recover that money and Air India can do that by increasing cash-flow."

Even before strike-related losses, Air India has been losing six billion rupees per month, or about USD $130 million. It is more than 220 billion rupees in debt, or $4.7 billion, and expects to take delivery of seven new Boeing 787 Dreamliners in the next few months.

FMI: www.airindia.in

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