State carrier Air India on Wednesday said that it has incurred a loss of Rs 5,548 crore in the fiscal year 2008-09. The Air India board, which met in Chennai, said the losses were primarily due to global economic slowdown, resulting in fewer passengers travelling and lower load factor.
The loss comes in the wake of IATA forecast which had predicted that the losses in the aviation industry for the year 2008 would be around $16.8 billion, followed by a loss of $11 billion for the year 2009, due to weak revenue environment and increase in operating costs.
In line with the market trend, Air India’s total revenue has declined from Rs 15,252 crore in 2007-08 to Rs 13,479 crore in 2008-09. Its 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.
Other major factors that have contributed to Air India’s losses are steep hike in aviation turbine fuel (ATF), rise in depreciation costs due to induction of new fleet and interest rates on aircraft loans and borrowings.
Air India has been spending around 10 per cent of the airline's total salary bill to pay its team of over 160 foreign pilots and hiring firms.
As revealed by the airline in response to an Right To Information application, NACIL paid Rs 93.29 crore towards salaries and expenses to the agencies which provided expatriate pilots to Air India and Air India Express last fiscal.
Of this, Air India paid Rs 46.63 crore ($93,27,644.23) while its budget arm Air India Express spent Rs 46.66 crore ($93,33,732.11) on the expat pilots during the same period.
"In addition, the company spends up to Rs 7,500 per day to accomodate foreign pilots in expensive hotels and provide chauffeur-driven air conditioned cars to them for non-flying duties as well," a Indian Pilots Guild spokesperson said.
There are 163 expatriate pilots in Air India, besides 1,253 Indian pilots and about 200 trainees.