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Mismanagement charge: HC issues notice to Nacil, govt

Mismanagement charge: HC issues notice to Nacil, govt
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First Published: Thu, Apr 08 2010. 10 07 PM IST

Aircraft purchases: An activist group has alleged that the civil aviation ministry’s actions have driven Air India into huge losses. Abhijit Bhatlekar / Mint
Aircraft purchases: An activist group has alleged that the civil aviation ministry’s actions have driven Air India into huge losses. Abhijit Bhatlekar / Mint
Updated: Thu, Apr 08 2010. 10 07 PM IST
New Delhi: The Delhi high court on Thursday issued notices to the Union government and National Aviation Co. of India Ltd (Nacil) over charges that unnecessary aircraft purchases by the civil aviation ministry led to huge losses at flag carrier Air India.
The court also issued notices to the Central Bureau Of Investigation (CBI) and the Comptroller and Auditor General of India.
Aircraft purchases: An activist group has alleged that the civil aviation ministry’s actions have driven Air India into huge losses. Abhijit Bhatlekar / Mint
The high court bench headed by chief justice Madan B. Lokur was hearing a petition filed by the Centre for Public Interest Litigation, an activist group, through their advocate Prashant Bhushan.
Demanding a CBI investigation, Bhushan alleged the civil aviation ministry, through deliberate and misdirected decisions and actions, drove Air India and Indian Airlines—which have merged into Nacil—to losses of “thousands of crores of rupees”.
The government had ordered 111 aircraft as part of a fleet expansion programme. “This unnecessary expansion was made without a proper study and without any transparency,” Bhushan said.
The aircraft purchase cost Rs67,000 crore. Loans were taken from American and Indian banks to finance the expansion and the firm is now deep in debt and suffering huge losses, he added.
Asking for an independent aviation regulator, Bhushan said major profit-making routes and timings were given to some private airlines.
“Foreign airlines were given unrestricted entry into India and major routes were given to them without taking any reciprocal benefits for Air India,” he said.
Air India, expected to post a loss of Rs5,400 crore for 2009-10, is to prepare a turnaround plan that will hold the key to further financial assistance from the government. The government has so far infused Rs945 crore into Air India but further help will depend on the airline’s ability to put its finances in order and cut costs.
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First Published: Thu, Apr 08 2010. 10 07 PM IST