 "Air India registers Rs 100 cr operating profit in FY 16, finds mention in PM's I-day speech")
Air India’s return to profitability was acknowledged by Prime Minister Narendra Modi in his Independence Day speech on Monday.
“Air India was infamous for incurring losses. My government has succeeded in bringing Air India to a situation of clocking operational profit,” Modi said, taking credit for the carrier’s achievement.
Modi did not disclose the airline’s profit figure in his speech. According to airline officials, Air India has made an operating profit of Rs 100-110 crore in FY16, higher than the earlier projection of Rs 8-10 crore, driven by low jet fuel price.
The airline, which is under Rs 30,000-crore government bailout plan, closed its financial 2015-16 accounts recently, but the accounts are yet to be audited. Top officials confirmed that the airline had made Rs 100-crore operating profit in FY16, but refused to divulge other details.
“Air India was infamous for incurring losses. My government has succeeded in bringing Air India to a situation of clocking operational profit,” Modi said, taking credit for the carrier’s achievement.
Modi did not disclose the airline’s profit figure in his speech. According to airline officials, Air India has made an operating profit of Rs 100-110 crore in FY16, higher than the earlier projection of Rs 8-10 crore, driven by low jet fuel price.
The airline, which is under Rs 30,000-crore government bailout plan, closed its financial 2015-16 accounts recently, but the accounts are yet to be audited. Top officials confirmed that the airline had made Rs 100-crore operating profit in FY16, but refused to divulge other details.
This is the carrier's first operating profit in a decade. At a net level though the carrier is making a huge loss as its interest and maintenance cost remain high. In April government informed the Parliament that the airline is likely to post Rs 2636 crore net loss in FY 16.
A senior Air India official said that the though low crude played a major role behind the airline's performance, its result also improved due to increased aircraft utilisation and improved seat occupancy. The airline is estimated to have saved 30 per cent on its fuel bill due to lower crude oil price even as it added new services between Delhi-San Francisco and Ahmedabad-London.
The airline's chairperson Ashwani Lohani in an earlier interview said that the airline was looking to clock net profit by FY 18 two years earlier than what was originally envisioned in the Turn Around Plan (TAP) approved in 2012.
"Fall in oil prices have helped. But, the recovery is much higher than what has been the gains from oil prices. We are looking at consolidation and growth. And, we are talking about more flights and aggressive revenue management. To put it simply, there is an attempt to run Air India like a commercial organisation," Lohani had said.