New Delhi: With Air India grappling with financial crisis, the Supreme Court has rapped the government for giving "profitable routes" to private carriers and asked it to plan a turnaround in the national carrier saying it "faces extinction" if things continued like this.

"Why many lucrative routes have been given to private carriers," a bench comprising justices Vikramjit Sen and Kurian Joseph observed while expressing concern over Air India taking a beating against private airways, post merger of Air India and Indian Airlines.

The bench, which wanted the Civil Aviation Ministry to think over the various issues plaguing the national carrier, also said other area of concern was the priority given to private airlines with Air India aircraft being asked to hover around during the peak landing hours causing huge loss of money on fuel.

"A situation has reached where after travelling in private airlines, when one boards Air India, he thinks why have I taken this flight. The situation is really, really bad, we are sorry to say. The financial loss is already being talked about since long, passenger dissatisfaction is a known fact too.

"Strangely, Air India is focusing on money-losing routes while many profitable routes have been given to the private airlines. Please think of how a turnaround can be brought about," the bench said, adding, "if things continue like this the airline faces extinction."

The remarks were made during the hearing of the cross-appeals filed by Air India Management and workers union against the order of the Bombay High Court which dealt with various contentious issues arising out of the Justice Dharmadhikari report on the merger of the erstwhile Indian Airlines and Air India.

Attorney General Mukul Rohtagi was appearing for the Centre and Air India.

The high court had dealt with the issues of 75 per cent of wages and salary for the workers and had asked the unions to approach the Central Government Industrial Tribunal regarding lowering of salary allowances following the merger.

The high court had on January 27 declined to stay the implementation of the Dharmadhikari report on the merger of the erstwhile Indian Airlines and Air India. The unions' had contended that the management should have issued notices to them under section 9A of the Industrial Disputes Act before altering service conditions.

The petitions were filed in the high court by the unions against the national carrier over the "arbitrary" change in service conditions of the pilots, engineers and other employees post merger.

Air India had set up a four-member committee under former Supreme Court judge D M Dharmadhikari on the integration of workforce post merger. The Committee submitted a report to the government in January 2012. The union, however, contested the recommendations.

The high court had earlier, in response to one of the petitions, passed an interim order asking the authorities to keep the service conditions unchanged.

The unions had argued that the airline management could not unilaterally transfer employees to other departments of sister concerns.

In one of the petitions, Indian Commercial Pilots' Association, representing the former Indian Airlines pilots, had challenged the January 2013 notifications by the airline which provided for only 75 per cent of the arrears payable to the pilots till November 2012.

In November 2011, the airline management had fixed pilots' emoluments for 72 flying hours as well as the "lay over subsistence allowance". The pilots rejected the lower allowances and demanded full payment terming it as a move to alter service conditions.--PTI