"But based also on the statutory auditors' reports, the airline had an operating loss of Rs 321.4 crore previous year because the required provisions were not made", Director General in the Comptroller and Auditor General (CAG)'s office V. Kurian told reporters here.
Heavily-indebted Air India, which was bailed out in 2012 with $5.8 billion of government funding, saw its short-term loans rising to four times the limits laid down in its turnaround plan, the CAG said.
The CAG report also revealed that the airline has also fallen miserably short in generating revenues from asset monetisation due to flawed selection of assets. Such lending eroded the benefits of the financial restructuring plan.
The report said the airline should monetise more of its assets faster to reduce its debt burden and speed up the leasing of narrow-body aircraft to improve its performance.
CAG has also recommended that considering the significant equity funds committed by the Government to the airline, a decision regarding grant of additional bilateral rights to foreign carriers should take into consideration their impact on Air India.
"It is therefore the equivalent of earnings before interest and tax (EBIT) and includes provision of Rs 1,867.78 crore of depreciation."Had depreciation been excluded from the expenditure the operating profit would have significantly increased", the airline's spokesperson said in a late evening statement".
"For 2015-16 where Air India has reported an operating profit of approximately Rs 105 crore, the audit of Air India's standalone accounts for 2015-16 has been completed", Deputy CAG Pradeep Rao said.
These failures hurt the airlines' revenue generation, leading to more short-term loans being issued.
Also, advertisements worth Rs 24 crore released by it were in violation of financial propriety and Supreme Court regulations, stated the Comptroller and Auditor General (CAG) report tabled in the Delhi Assembly today. "Such long delays point to the inefficiency of the procurement process given the urgency of the requirement", the audit report said.
"The company is yet to recover its total cost of operation", it added.
Commenting on proportion of worldwide services that did not meet total costs was far higher compared to domestic services the report states that the "shortfall in recovery in respect to global services increased to ₹ 4,273 crore in 2013-14 from ₹ 3,697 crore in 2012-13, ₹ 4,463 crore in 2014-15 and reduced to ₹ 3,755 crore in 2015-16".