Govt audit blames ministry, management for Air India troubles

An Indian government report has blamed both Air India's management and the Ministry of Civil Aviation for letting the beleaguered carrier become both unprofitable and debt-ridden.
The state-owned airline has been making substantial losses since 2005 and has racked up debts of Indian rupee (Rs) 384 billion ($8.32 billion) as of 31 March 2010 because of plans to purchase new aircraft, inefficient operations and competition from domestic and international carriers, according to an audit by the Comptroller and Auditor General of India.
Despite the government's attempts to shore up Air India, the equity infusion of Rs3.25 billion in 2005-2006 and Rs8 billion in 2009-2010 were a "mere drop in the ocean", it said in the report that was presented to the country's parliament on Thursday, 8 September 2011.
The problems first stemmed from Air India's decision in 2005 to purchase 68 Boeing long-range aircraft and the decision by Indian Airlines, which merged with the former, to order 43 aircraft of the Airbus A320 family. These decisions, said the report, were made without due consideration as to payment or whether there was sufficient demand

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