<p>The CAG report said these freebies hurt the carrier as such expenditure is not reimbursed.<br />The scathing report on the government airline recommended that “all free travel by AI officers (on duty or on leave) in business/first class should be prohibited.”<br /><br />Noting that all existing facilities be withdrawn till AI’s financial condition improves dramatically, the report said given the “life-threatening crisis that AI is currently facing, top and middle management in AI should set an example in this regard”. The report termed the merger of Air India and Indian Airlines ‘ill-timed’. The entity, which has not posted profit since merger in 2007, has been heavily dependent on debt and the government should promptly infuse more equity to reduce the debt-equity to industry standards. The merged entity’s financial position has been “abysmally poor” from 2004/05 to 2009/10, it said.<br /><br />“The potential benefits of the merger would have been far higher, had this been undertaken before finalisation of the massive and separate fleet acquisition exercises by AI and IA,”it said. The auditor noted that till date Air India does not have any time bound plan to merge key activities. On the mounting losses of the airline, the report pointed out that international routes have become loss-making. The bigger aircraft were used to fly on long haul overseas routes which turned out to be money losing.<br /><br />“This sector on which American/Canadian airlines were already operating non-stop flights and based on which AI was made to reconsider its fleet requirement, turned out to be a loss making sector right from the date of commencement and continues to be so,” the report said.<br /></p>
<p>The CAG report said these freebies hurt the carrier as such expenditure is not reimbursed.<br />The scathing report on the government airline recommended that “all free travel by AI officers (on duty or on leave) in business/first class should be prohibited.”<br /><br />Noting that all existing facilities be withdrawn till AI’s financial condition improves dramatically, the report said given the “life-threatening crisis that AI is currently facing, top and middle management in AI should set an example in this regard”. The report termed the merger of Air India and Indian Airlines ‘ill-timed’. The entity, which has not posted profit since merger in 2007, has been heavily dependent on debt and the government should promptly infuse more equity to reduce the debt-equity to industry standards. The merged entity’s financial position has been “abysmally poor” from 2004/05 to 2009/10, it said.<br /><br />“The potential benefits of the merger would have been far higher, had this been undertaken before finalisation of the massive and separate fleet acquisition exercises by AI and IA,”it said. The auditor noted that till date Air India does not have any time bound plan to merge key activities. On the mounting losses of the airline, the report pointed out that international routes have become loss-making. The bigger aircraft were used to fly on long haul overseas routes which turned out to be money losing.<br /><br />“This sector on which American/Canadian airlines were already operating non-stop flights and based on which AI was made to reconsider its fleet requirement, turned out to be a loss making sector right from the date of commencement and continues to be so,” the report said.<br /></p>
