New Delhi, March 10 (IANS) Air India has posted a standalone operating loss for 2015-16 of Rs 321.4 crore, though the company has claimed an operating profit of Rs 105 crore, the official auditor said on Friday.
The Comptroller and Auditor General (CAG) also pointed out significant understatement of losses by the national carrier in its financial statements.
“Air India is claiming an operating profit of Rs 105 crore for financial year 2015-16. But based also on the statutory auditors’ reports, the airline had an operating loss of Rs 321.4 crore last year because the required provisions were not made,” Director General in the CAG’s office V. Kurian told reporters here.
Kurian was presenting the CAG’s audit report on the financial restructuring plan of Air India tabled in Parliament on Friday.
He said the airline had made inadequate provisions for payment of various liabilities, including outstanding amounts to the Airports Authority of India and payment to employees for encashing leave, and had also made excess valuation of a company property in Delhi.
The official auditor said that the understatement of losses was to the extent of Rs 1,455.8 crore for 2012-13, Rs 2,966.66 crore for 2013-14 and Rs 1,992.77 crore for 2014-15.
“Considering the effect of these qualifications on the financial statement, the EBITDA (earning before interest, tax, depreciation, amortisation) of Air India would be negative (up to March 2015),” the report said.
CAG noted that the actual working capital requirements of Air India, being far in excess of the limits envisaged in the financial restructuring plan, had resulted in the company taking additional short-term loans.
Short-term loans were on the rise and amounted to Rs 14,416.85 crore as of March 2015, and Rs 14,550.88 crore as of March 2016.
“The high volume of short-term loans had eroded the benefits of financial restructuring exercise carried out,” the report said.
The value of the airline’s short-term loans was nearly four times the cash credit laid down in the turnaround plan, it added.
The report also said Air India had incurred a book loss of Rs 671.07 crore on the sale of five Boeing 777-200 Long Range aircraft and payment of Rs 324.67 crore towards interest on loans availed for procurement of these aircraft.
CAG’s analysis of the routes operated by the airline showed that only 17 of its services recovered total costs in 2015-16, while 36 services, including five international and 31 domestic ones, did not recover the variable costs during the year, though they met jet fuel costs.
Another 169 services (56 international and 113 domestic) did not recover total costs, though they recovered variable costs.