PAC criticises Air India for acquiring aircraft through debt

Victoria
By Victoria January 23, 2012 11:57

PAC criticises Air India for acquiring aircraft through debt

The Indian Parliament’s Public Accounts Committee (PAC) has asked Air India to submit all documents related to the purchase of aircraft and other large items within a week. Air India and previous Indian Airlines managers faced some tough questions by the Parliamentary committee which also lambasted them over complaints of poor passenger services. The grilling was based on a recent CAG report on civil aviation which had said that the decision to acquire 111 aircraft by Air India through debt was “a recipe for disaster” and should have raised alarm in the government at the time.

Air India officials told the PAC that it was their idea to merge the two carriers as the ‘open sky’ policy had increased competition in the aviation sector.

They also said that since their fleet at that time was ageing, they had thought of acquiring new aircraft and believed that a merger would provide them with greater strength to compete in the new environment.

As such they have been asked to submit all documents on merger and fleet acquisition from the conceptual stage onwards to the committee. This grilling on their plan to acquire aircraft is hypocritical to a small extent as government approval for the same was given.

Air India officials refuted suggestions that they had shut down profitable routes.

In its latest report tabled in Parliament last September, the PAC also called the merger of the two state-run carriers—Air India and Indian Airlines—‘ill-timed’ and said that “the financial case for the merger was not adequately validated prior to the merger”.

Victoria
By Victoria January 23, 2012 11:57
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