CAG raps Air India for losses of over Rs 20 cr

The CAG has criticised Air India for not acting on complaints that led to three foreign airlines terminating ground handling services and causing losses of over Rs 20 crore.

After auditing a year's data of Air India's Flight Handling Discrepancies Report for Malaysian, Ethiopian and Saudi Arabian airlines, CAG found that they had been complaining of substandard services.

"These deficiencies in services were also stressed upon by the consumer airlines through email but no timely corrective action was taken by Air India Limited, leading to termination of ground handling agreement (GHA) resulting in loss of Rs 12.21 crore between January 2010 and March 2012 and recurring loss of Rs 8.53 crore per annum from April onwards," it said.

The Malaysian airline terminated the GHA seven months ahead of schedule, citing prolonged and continuous deterioration of services.

The Ethiopian carrier terminated its contract in February 2010 after complaining about poor service, while the Saudi Arabian airline ended its agreement in March 2012 for not redressing its complaints.