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* Air India understated losses for three years
* Air India's short term loans worth 4 times limit set
* Debt grew due as it missed asset-monetisation goals
By Aditi Shah
NEW DELHI, March 10 (Reuters) - India's state-owned airline Air India understated its operating losses by nearly $1 billion over three fiscal years to March 2015, the federal auditor said in a report, highlighting the carrier's financial distress.
Repeated calls to an Air India spokesman and an email seeking comment went unanswered.
Air India did not make certain provisions required under accounting standards and valued some assets differently, resulting in the understatement, the Comptroller and Auditor General (CAG) of India said.
"We have found that they have not made provisions which they should have made in terms of standard accounting procedures," senior CAG official, V. Kurian, told reporters on Friday.
Losses were understated by $219 million in the year to end-March 2013, $445 million in the year to end-March 2014 and $299 million in the year to end-March 2015, the report said.
Air India was bailed out in 2012 with $6.3 billion of government funding, after years of ceding market share to younger, low-cost rivals
Its market share in 2016 was 14.6 percent while market leader IndiGo Airlines, owned by InterGlobe Aviation, had a 39.3 percent share, government data showed.
The airline has also breached loan limits set under the government restructuring plan "due to failure in generating projected revenue, mainly on account of non-achievement of asset monetisation target (and an) increase in staff costs," the CAG said.
The report, which the government will use to evaluate Air India's progress in restructuring, said the airline's short-term loans rose to 145.51 billion rupees ($2.2 billion) as of March 31, four times its limit.
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. ($1 = 66.5700 Indian rupees) (Editing by Muralikumar Anantharaman/Ruth Pitchford)