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IndiaAir India makes operational profit for first time in 8 years

Air India makes operational profit for first time in 8 years


New Delhi: For the first time in a decade, Air has reported an operating profit of Rs 105 crore in the last fiscal aided by lower fuel costs and rise in passenger numbers.

The state-owned airline, which is working on ways to improve its financials, had an operating loss of Rs 2,636 crore in 2014-15.

During its meeting today, the Air India board approved the financial numbers for 2015-16 and the carrier has reported an operating profit of Rs. 105 crore, sources said.

This is the first time since 2007 — when the erstwhile Indian Airlines was merged with Air India — that the carrier has eked out an operating profit.

Having an operating profit in a decade is an encouraging sign for the airline, which is seeking to turn around its fortunes amid stiff competition, sources said.

A decline of nearly 31 percent in fuel costs in the last financial year compared to the year-ago period was a key factor in the airline becoming operationally profitable.

According to the sources, the benefits of lower fuel costs were passed on to passengers, which is also reflected in terms of lower yield during the last fiscal. Yield — an indicator of ticket prices — declined by 7.7 percent.

In 2015-16, Air India carried 18 million passengers, registering a growth of 6.6 percent. In the comparable period, the same stood at 16.88 million, they added.

However, in 2015-16, the carrier saw its revenue slide to Rs. 20,526 crore from Rs. 20,613 crore in 2014-15.

Indicating improved operating performance, EBITDAR (earnings before interest, tax, depreciation, amortisation and rentals) rose to Rs. 3,587 crore last financial year, from Rs. 1,436 crore in 2014-15.

Last fiscal, the airline's capacity deployment and aircraft utilisation went up by 4.8 percent and 7.5 per cent, respectively.

On account of currency fluctuations, the carrier incurred a forex loss Rs. 350 crore in 2015-16.

Air India is staying afloat on a Rs. 30,000-crore bailout extended by the government.

The Northlines is an independent source on the Web for news, facts and figures relating to Jammu, Kashmir and Ladakh and its neighbourhood.

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