<p>The board of Air India (AI) on Tuesday approved the direct import of Aviation Turbine Fuel (ATF) in order to peg escalating costs. <br /><br /></p>.<p>Accordingly, AI would shortly be appointing a service provider, who would source the supply as well as provide the necessary infrastructure for storage and distribution of the fuel for in-plane fuelling. <br /><br />The AI board, as part of the risk management strategy, approved the hedging of fuel up to 20 per cent of the total international uplifts and allotted specific amount in its budget. A risk management team of senior officials was set up in order to continuously monitor and take positions in fuel hedging.<br /><br />Among other things, the AI board also took on record the progress on the restructuring of the working capital into long term loans whereby Rs 11,000 crore worth of working capital are proposed to be converted into long term loans and Rs 3,400 crore into cash credit facilities. Government of India would provide support in respect of the non convertible debentures of Rs 7,400 crore, said an AI release here.<br /><br />Equity input<br /><br />AI is expecting an equity infusion shortly for the financial year 2012-13 that would not only improve operating and financial parameters but would also give considerable comfort to its institutional lenders in the form of better net worth. <br /><br />Air India’s operating and financial performance up to February 2012 registered a continuous improvement compared to last year. The passenger revenue during February 2012 went up to Rs 949 crore from Rs 718 crore in February 2011, registering a 32.2 per cent increase. <br /><br />Total number of passengers flying AI went up from 0.962 million in February 2011 to 1.091 million in February 2012, an increase of 13.4 per cent. The national carrier expects to end the year with higher than budgeted revenue performance.<br /><br />However, the escalating cost of fuel is likely to add Rs 2,200 crore and its fuel bill is estimated to be around Rs 8,000 crore for the year 2011-12. Added to this, the additional interest cost of Rs 1,500 crore, eroded the profitability of the airline.<br /><br />The Board also approved the capital budget for the year 2012-13, in sync with the annual Plan outlay of the company involving a capital outlay of more than Rs 400 crore on non-aircraft projects.</p>
<p>The board of Air India (AI) on Tuesday approved the direct import of Aviation Turbine Fuel (ATF) in order to peg escalating costs. <br /><br /></p>.<p>Accordingly, AI would shortly be appointing a service provider, who would source the supply as well as provide the necessary infrastructure for storage and distribution of the fuel for in-plane fuelling. <br /><br />The AI board, as part of the risk management strategy, approved the hedging of fuel up to 20 per cent of the total international uplifts and allotted specific amount in its budget. A risk management team of senior officials was set up in order to continuously monitor and take positions in fuel hedging.<br /><br />Among other things, the AI board also took on record the progress on the restructuring of the working capital into long term loans whereby Rs 11,000 crore worth of working capital are proposed to be converted into long term loans and Rs 3,400 crore into cash credit facilities. Government of India would provide support in respect of the non convertible debentures of Rs 7,400 crore, said an AI release here.<br /><br />Equity input<br /><br />AI is expecting an equity infusion shortly for the financial year 2012-13 that would not only improve operating and financial parameters but would also give considerable comfort to its institutional lenders in the form of better net worth. <br /><br />Air India’s operating and financial performance up to February 2012 registered a continuous improvement compared to last year. The passenger revenue during February 2012 went up to Rs 949 crore from Rs 718 crore in February 2011, registering a 32.2 per cent increase. <br /><br />Total number of passengers flying AI went up from 0.962 million in February 2011 to 1.091 million in February 2012, an increase of 13.4 per cent. The national carrier expects to end the year with higher than budgeted revenue performance.<br /><br />However, the escalating cost of fuel is likely to add Rs 2,200 crore and its fuel bill is estimated to be around Rs 8,000 crore for the year 2011-12. Added to this, the additional interest cost of Rs 1,500 crore, eroded the profitability of the airline.<br /><br />The Board also approved the capital budget for the year 2012-13, in sync with the annual Plan outlay of the company involving a capital outlay of more than Rs 400 crore on non-aircraft projects.</p>
