A decision by Air India to spend 50,000 crore to buy 111 new aircraft is likely to be strongly criticized by the Comptroller and Auditor General (CAG) as it feels they are unlikely to generate enough revenues to service the national carrier's huge debts. This would badly impact the airline's financials from 2011 onwards, a draft report from the national auditor said as per a report in the Economic Times.
The draft report, which will be tabled in Parliament during the Budget session, also criticizes Air India for opting for what it describes as an " expensive" loan to purchase its 43 Airbus aircraft though it could have opted for a cheaper loan. CAG audits the finances of public sector undertaking, including Air India.
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