THE MISUNDERSTOOD MAHARAJA
Article Abstract:
The losses of Air India (AI) in the 3 months ended August 1998 have been estimated to be Rs1.47 billion. This has been due, among other reasons, to a high wage bill. AI, on an average, has about 700 workers per aircraft, making it over-staffed. Its management of revenue is ineffectual. Its debt- equity ratio for 1997-98 was almost 5:1. Its short-term borrowings are Rs11 billion. Its total cash flow need till 2000 AD is more than Rs20 billion. AI has invested Rs35 billion for acquiring 6 aircraft. Since costs are dollar denominated, it has also been hit by the depreciation of the rupee. Around 20 percent of AI's turnover comes from the south Asian markets and these routes have become unviable due to the recession. On the India-Europe-UK-USA route, which accounts for about half of the total system capacity, fares have been cut to almost half. The Government of India too is responsible for AI's current situation as it has been careless in awarding traffic rights to foreign carriers. AI's fleet composition is deemed primitive and it requires medium commercial long-range aircraft to be added to its fleet. It has also neglected cargo, ground handling and maintenance. AI has appealed to the Government of India for a Rs10 billion bailout package even as it will have to scout for a private investor who can invest another Rs7.7 billion. Its fleet operation in 1998-99 has improved by around 8 percent with it doing 8.34 hours per aircraft per day (7.13 hours per aircraft per day during April- August 1997). It has bagged a contract for ground handling from the British Airways and it hopes to earn more income as traffic has been projected to grow at 6-7 percent. (tsm)
Publication Name: Financial Express Investment Week
Subject: Business, international
ISSN: 0015-2005
Year: 1998
User Contributions:
Comment about this article or add new information about this topic:
HDFC: THE BLUE CHIP
Article Abstract:
Housing Development Finance Corporation had a 63 percent share in the housing finance market in 1997-98. It posted a net profit of Rs2.93 billion on revenues of Rs14.44 billion in 1997-98. Fixed deposits account for 45 percent of HDFC's funding requirements while individuals accounted for 67 percent of total loans disbursed. Its deposits increased by 26 percent to Rs44.23 billion in 1997-98. It added 12 branches to its existing 28 branches in 1997-98 and plans to set up 10 more branches in 1998- 99. The company has decided to diversify into the insurance sector apart from launching a property fund and a mutual fund to invest in real estate. (khr)
Publication Name: Financial Express Investment Week
Subject: Business, international
ISSN: 0015-2005
Year: 1998
User Contributions:
Comment about this article or add new information about this topic:
- Abstracts: THE NEDUNGADI BANK LTD BANK CREDIT GROWTH UNABATED BY SLUMP
- Abstracts: THE INDIAN SOFTWARE (SUCCESS AND SOB) STORY: THE IMPEDIMENTS. KARNATAKA PLANS 2,500MW LNG-BASED POWER PROJECTS
- Abstracts: HJS STONES LIMITED MADHUCON STARTS LARGEST STONE CRUSHING PLANT
- Abstracts: OSWAL CHEMICALS AND FERTILISERS - BITING MORE THAN IT CAN CHEW GUJARAT NARMADA VALLEY FERTILIZERS CORPORATION - NOT NOURISHED WELL
- Abstracts: ABSIL LAUNCHES ALL-IN-ONE SERVICE. RAJAN RAHEJA GROUP LAUNCHES CINE CABLE. SODEXHO LAUNCHES GIFT CHEQUE SCHEMES