Air India flights cancelled due to 100 pilots threaten to quit

As many as 23 Air India pilots reported sick leading to cancellation of 10 international flights and the state-owned airline could face more trouble with around 100 pilots threatening to quit.
    
The pilots belonging to the Indian Pilots' Guild (IPG), which has pilots of the erstwhile Air India as its members, are headed for a confrontation charging the management today with adopting discriminatory attitude against them and stalling their career progression.
    
The threat to quit could hit Air India's international operations and comes on the back of cancellation of the 10 flights of its low budget arm "Air India Express" in the last seven days.
    
Air India sources said that 10 commanders and 13 co-pilots reported sick during this period.
    
The Gulf sector remained unaffected but the Kolkata-Dhaka and Chennai-Singapore sectors were hit, the sources said.

The threat to quit came four days ahead of the launch of a training programme for pilots to fly the Boeing 787 Dreamliners, the first of which is expected to join the airline by December.

In a letter to Air India CMD Rohit Nandan, over 100 pilots, owing allegiance to the IPG said they were "compelled to seek a No Objection Certificate so that we may consider seeking employment elsewhere".

Copies of the letter were also sent to Civil Aviation Minister Vayalar Ravi and other officials, besides the Regional Labour Commissioner, Mumbai.
    
Reacting to the development, an Air India spokesperson said, "We have not received any strike notice so far or a notice for NOC formally from the IPG ".
    
One of the prime grievances of the IPG is the management's decision to train pilots of erstwhile Indian Airlines for the Boeing 787 Dreamliners.

When contacted, Air India officials, requesting anonymity, said the IPG office-bearers were currently holding negotiations with the management and "we are hopeful of sorting out their issues".

The IPG represents around 200 pilots of the pre-merger Air India, while the Indian Commercial Pilots Association that had gone on strike in April-May this year represents around 1,400 pilots of the erstwhile Indian Airlines.

A total of 101 pilots signed the letter claiming they felt "cheated by the management's unfair and discriminatory decisions, leading to a complete stall of our career progression", IPG sources said.

GoM meet Finance Minister for Air India's troubled today

The group of ministers (GoM) led by Finance Minister Pranab Mukherjee looking into Air India's troubled financial situation will meet Friday, officials said.

According to an Air India official, the GoM would primarily look into the airline's performance as well as consider granting an additional equity to the flag carrier.

The official did not divulge details of the equity to be granted but said the grant would be substantial. The meeting was originally scheduled for Thursday, a civil aviation ministry said.

"The GoM would also consider our proposal of converting some of our short-term loans into long-term loans, thereby allowing us to save Rs.900-1,000 crore in interest payments per annum," the airline official said.

The GoM would also discuss the airline's order of 27 Boeing Dreamliners it placed in 2005-06.

Recently, Civil Aviation Minister Vayalar Ravi said the government was not considering selling its stake in Air India.

"My first priority as a civil aviation minister is to bring Air India in no-profit, no-loss (situation)," he had said.

The last GoM meeting took place Aug 18 when the airline's credit limit by the state-run oil marketing companies (OMCs) was extended by two-three months.

Earlier, the OMCs had put the flag carrier on a cash and carry basis -- which meant that the airline would have to pay every time it bought fuel from these companies.

Currently, the airline owes Rs.2,300 crore to the OMCs, from whom it buys Rs.17 crore worth fuel daily.

The GoM was formed to look into the airline's turnaround and financial restructuring plan, which is currently being reviewed by a sub-committee of secretaries.

According to official figures, Air India's cumulative losses amounted to Rs.22,165 crore, apart from a Rs.22,000 crore debt burden to buy new aircraft. The debt-ridden carrier has to pay almost Rs.3,200 crore in interest to its lenders.

Kiran Bedi gets rebate tickets, hosts pay in full

Team Anna is once again under the scanner. Key member of the anti-corruption and Lokpal Bill crusade, Kiran Bedi, may have some explaining to do over allegations that she has been inflating travel expenses that NGOs and institutions pay her for attending seminars or meetings organised by them.

Bedi as a gallantry award winner gets 75 percent rebate on Air India Economy Class tickets. As per a English newspaper’s report, the former top cop pays discount fares but charges her hosts the full fare and at times also claimed Business Class fare while flying Economy.

The report further says that Bedi has been carrying on with the practice from as far back as 2006 when she was a serving IPS officer - her last such travel with inflated invoice was as recent as September 29 this year. All the reimbursement cheques were credited in the account of Bedi’s NGO, India Vision Foundation.

The explanation form Bedi camp: Her chartered accountant has been quoted as saying that what was being seen as a “mismatch” was actually a “saving” as Bedi was spending less than what she was reimbursed for and the rest of the money came in handy for travels for causes for which she got no remuneration.

As an example, the newspaper has furnished the details for her recent trip to Hyderabad and Chennai.

This year on September 29 this year, Bedi flew Delhi-Hyderabad on Air India (AI 560), then Hyderabad-Chennai (AI 546), in Economy class. The next day, she took a flight back to Delhi (AI 539).

She paid a total fare of Rs 17,134, but the invoice was generated for Rs 73,117 (payment is pending). While Bedi flew form Delhi to Hyderabad, onward to Chennai and then back to Delhi, the fares being claimed are for Delhi-Hyderabad-Delhi (Economy) and Delhi-Chennai-Delhi (Business class).

March 6, 2009: Flew Delhi-Mumbai-Delhi (IC 688, IC 605) on discounted tickets. Fare: Rs 12,483. Bill submitted for/amount received: Rs 32,495.

Kiran Bedi will be explaining her position at a press conference later today

Kingfisher Airliness's auditor said needs to infuse funds

Kingfisher Airlines Ltd., controlled by liquor baron Vijay Mallya, needs to infuse required funds to continue as a "going concern", its auditor has said, raising concerns about the future of the loss-making carrier.

The auditors, B.K. Ramadhyani & Co, in its report, which is part of the company's annual report for the fiscal year that ended March 31, 2011, has mentioned that the company's accumulated losses at the end of the financial year "were more than fifty percent of its net worth."

Kingfisher shares fell Thursday more than 5 percent to a low of 24.8 rupees, hovering close to its year-low of 23.35 rupees.

The airline has not posted a profit since its inception in 2005. For the quarter ended June, Kingfisher widened its net loss by 43 percent to 2.64 billion rupees.

The term "going concern", in accounting parlance, refers to a company's ability to continue operations in the near future.

The annual report has been posted on the Bombay Stock Exchange website.

The auditor's comments come at a juncture when Indian carriers are struggling despite a booming aviation market. All three major carriers Kingfisher, Air India and Jet Airways are loss-making as prices of key inputs like crude remain volatile, and consequently unable to raise equity.

Earlier this month, the Comptroller and Auditor General of India (CAG) criticised Air India Ltd's (AIL) decision to buy 111 Boeing and Airbus planes in 2005, a move which was approved by the government, saying it imposed an "undue long term financial burden on the carrier".

In late August, Kingfisher Airlines Ltd said its board had approved a rights issue of shares to raise up to 20 billion rupees ($434 million).

The company gave no timing or details of the proposed issue, but analysts say raising funds for an airline company is not going to be easy.

"Resolutions have been taken, but its been three years since the airline industry has not been able to raise funds at all," said Mahantesh Sabarad, sector analyst at Fortune Equity Brokers.

Kingfisher Airlines said lenders have independently assessed that the airline is viable as a going concern.

"During the year, RBI had directed the banks to independently assess the viability of KFA and this was in fact, carried out by the lenders with the assistance of SBI Capital Markets confirming that KFA is viable i.e. as a going concern," the airline said in an e-mail to Reuters.

The auditor said Kingfisher has also defaulted in repayment of loans and interest to banks and financial institutions.

"Delays were noticed in payment of interest and principal on several occasions during the year."

The auditor also said there have been some delays in remitting some statutory dues, pertaining to provident fund, fringe benefit tax, investor education and protection fund and employees' state insurance.

Earlier this year, the carrier had cut its debt through a debt restructuring process in which the airline issued 116.3 million shares to a consortium of 13 banks led by State Bank of India, after conversion of compulsory convertible preference shares at 64.48 rupees a share.

The airline had restructured its debt by converting almost 12 billion rupees of loans into equity and its debt stands at about 60 billion rupees at end April.

Government: Turnaround strategy for Air India soon

The government will soon spell out a comprehensive turnaround plan for flag carrier Air India, which is burdened with a cumulative loss of Rs.22,165 crore and struggling to even pay wages to employees, parliament was informed Friday.

"There are two plans under consideration -- one is the turnaround plan and the other is a financial restructuring plan which is being considered by a group of ministers," said Minister of State for Personnel, Public Grievances and Pensions V. Narayanaswamy.

"There will be a rationalisation of loss-making routes, rescheduling of aircraft, return of leased aircraft, rationalisation of manpower and a reduction in contractual employment," the minister told the Lok Sabha.

"A tournaround committee will also be formed, which will include senior management and union representatives," he said in the presence of Civil Aviation Minister Vayalar Ravi in the lower house.

He said while the cumulative losses of the carrier amounted to Rs.22,165 crore, the airline was also burdened with a debt of Rs.22,000 crore, which was borrowed to buy the new aircraft.

Narayanaswamy was replying to a calling attention motion called by five members of the opposition on the situation arising out of dwindling passenger share of Air India, poor financial health and delayed payment of wages to employees.

The motion was called by Gurudas Dasgupta of Communist Party of India and Bharatiya Janata Party's Murli Manohar Joshi, former aviation minister Syed Shahnawaz Hussain, Bhola Singh and Ramesh Bais.

The members, led by Dasgupta, earlier said it was shameful that in a matter of just four years the domestic operations of the flag carrier -- in the hands of Indian Airlines at that time but now merged into Air India -- had also started making losses.

They also came down heavily on chairman and managing director Arvind Jadhav, questioned his very appointment, while demanding to know the rationale behind the decision taken a few years ago to acquire as many as 111 new aircraft.

"More the purchase, more the booty. That is the perception," Dasgupta said, and wondered why the government had surrendered a host of bilateral flying rights to carriers of other countries. "Air India is being looted by its guardians."

The members also alleged that as opposed to 12-13 hours of average flying time per aircraft of other carriers, that of Air India was a mere 8 hours, and that was the main reason for the operational losses of the carrier.

Narayanaswamy sought to clarify that the flying hours were 10.55 on international operations and 8-9.5 hours on the domestic sector, which was just lower than that of Kingfisher at 10:45 hours. IndiGo logs 11:40 hours and SpiceJet 12:05 hours.

The minister made no mention of the decision taken to replace Jadhav.