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Air India could defer some aircraft deliveries

Air India could defer some aircraft deliveries as it seeks to restructure its business in order to get financial aid from its owner, the Indian government.

Civil aviation minister Praful Patel told parliament yesterday that the "rescheduling or cancellation of future aircraft deliveries" is one of the measures that the airline plans to adopt to "improve its financial position".

The flag carrier has taken delivery of 50 of the 111 Boeing and Airbus passenger aircraft that it ordered in 2005. As a result, its debt swelled to 152.41 billion Indian rupees ($3.2 billion) in June after paying for new aircraft.

The carrier told ATI in June that it had no plans to defer the deliveries as it wanted to see how things shaped up in the Indian economy first. The new aircraft were also coming in as it steadily sold older aircraft and returned leased ones, it added.

Patel, who also told the parliament that Air India lost about 72 billion rupees in the year ended 31 March, said that the carrier was taking other steps to stem losses. These include cutting flights on traditionally loss-making routes, returning leased capacity, reviewing manpower requirements and cutting the head count.

Air India, which has been making losses for years, has asked the government for an equity infusion of 12.31 billion Indian rupees and a soft loan of 27.5 billion Indian rupees that will be repaid over 15 years.

In June, it had an 18% share of the Indian domestic market with 6.5 million passengers. That put it behind Kingfisher Airlines (24.4%) and Jet Airways/JetLite (23.9%). Its load factor in June was 68%.

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