Cash crunch: Air India shuts down Pak offices | india | Hindustan Times
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Cash crunch: Air India shuts down Pak offices

india Updated: Mar 21, 2010 20:29 IST
Tushar Srivastava
Tushar Srivastava
Hindustan Times

What Kandahar and Kargil could not do, severe financial losses have. National carrier Air India has decided to

shut down its offices in Pakistan.

The airline, which has had no flight operations to Pakistan since 2008, has been maintaining offices in Lahore and Karachi.

Flight operations were earlier resumed in 2002 after 10 years, but the airline had never closed down its offices during that period.

Airline sources said an earlier proposal to shut down offices was shot down by the ministry of external affairs (MEA) as Pakistan has always been considered “strategically important.”

The Pakistan International Airlines does, however, run flights to India at present.

However, paying rent and salaries of the local staff was not considered a viable option especially when National Aviation Company of India (NACIL) — the company formed after merging Indian Airlines and Air India — is expected to incur a loss of Rs 5,400 crore this financial year.

The closure of overseas offices is part of a turnaround plan under which the government is releasing Rs 800 crore in equity support t NACIL.

“We have explained to the MEA that since there is no likelihood of resumption of flights to Pakistan in the near future so there is no point having offices in that country,” an official of the ministry of civil aviation said.

MEA spokesperson Vishnu Prakash could not be reached for comments despite repeated attempts.

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