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Our Bureau

Mumbai, June 10

Air India, the new entity created by the merger of Air India and Indian, expects to post a loss of more than Rs 2,000 crore for the financial year 2008, according to highly placed sources.

The rising cost of aviation turbine fuel (ATF), the increase in wages and aircraft leasing costs as also decline in yields due to increased competition on both the international and domestic sectors are among the major reasons being cited for the increase in losses being reported by the State-owned airline.

The airline was also affected by higher depreciation of its assets.

A clearer picture on the financial health of the airline will emerge in late September, by when the accounts would have been audited, sources indicated.

During 2006-07, the State-owned carriers suffered a loss of around Rs 722 crore with Air India reporting a net loss of Rs 447.93 crore, while Indian is said to have suffered a loss of Rs 275 crore.

Air India, however, is not the only airline affected by the rising cost of ATF.

Earlier this week, after a meeting with chief executives of domestic airlines, the Secretary of Civil Aviation, Mr Ashok Chawla, said that the domestic industry is likely to post a loss of about Rs 4,000 crore this year, which could double to Rs 8,000 the following year.

The Secretary felt that the rising cost of fuel and the low yields that airlines were reporting were the two major factors for losses being reported by the industry.

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Air India may post loss of more than Rs 2,000 cr

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