The Hindu : Business : IA board approves public offering

Online edition of India's National Newspaper
Friday, Apr 01, 2005

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Business

IA board approves public offering

By Our Special Correspondent

NEW DELHI, MARCH 31. The board of directors of Indian Airlines has approved in principle a proposal to make an Initial Public Offering (IPO), clearing the decks for the public sector carrier to tap the market for expanding its equity base. The offering will, however, be subject to the final approval of the Government.

As and when Indian Airlines gets the Government clearance, it will be for the first time that a national carrier would look for funds from the market. The board, which met yesterday, has only given its nod in principle for the IPO route, and details on the size and its specific purpose would be worked out later, official sources said.

The Minister of State for Civil Aviation, Praful Patel, had earlier said that Air India and Indian Airlines had been asked to launch their IPOs in the second half of 2005-06. Mr. Patel said both carriers were working towards the end of launching their respective IPOs.The board also accorded `in principle' approval to the formation of a joint venture with the Singapore Airport Terminal Services (SATS) in the areas of ground handling comprising passengers, cargo, ramp and security services at various airports in India, subject to final approval by the Government.

Successive year profit

Our Mumbai Correspondent writes:

The Indian Airlines board approved the revised revenue and expenditure estimates for 2004-05 and budget estimates for 2005-06.

The revised estimates for 2004-05 indicate a net profit of Rs. 17.50 crores, the second successive year when the company will be achieving a net profit after suffering net losses continuously for three years. This is notwithstanding the expenditure on aviation turbine fuel (ATF), which was budgeted at Rs. 1,445 crores, and is actually expected to be Rs. 1,806 crores owing to unprecedented rise in ATF prices. The fuel bill of IA in 1999-2000 was Rs 866 crores, which rose to Rs. 1,254 crores in 2003-04.

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