Fair weather! Air India cuts losses at last

The airline company has achieved the target set out in the Turn Around Plan

National carrier Air India has reduced its net loss by more than a quarter to Rs 5,547.47 crore (Rs 55.47 billion) in the previous fiscal as compared to a net loss of Rs 7,559.74 crore (Rs 75.59 billion) in FY12, government said on Monday.

Air India has achieved the target set out in the Turn Around Plan, and has made substantial progress in both operational as well as financial areas, Minister of State for Civil Aviation Minister Mahesh Sharma told Lok Sabha on Monday.

The main areas in which the company has registered improvements in FY15 in comparison to fiscal 2011-12 include seat factor, network yield, revenue from passengers and on-time performance on the operational side, he said.

The airline has also seen lower operating and net loss during the period, the minister said.

Since the implementation of TAP/ Financial Restructuring Plan, the operating loss has reduced from Rs 5,138.69 crore (Rs 51.38 billion) in the fiscal 2011-12 to Rs 2,171.40 crore (Rs 21.71 billion) in the year ended March 31, 2015, and the net loss has come down to Rs 5,547.47 crore (Rs 55.47 billion) in 2014-15 from 7,559.74 crore (Rs 75.59 billion) in 2011-12, the minister said.

The erstwhile United Progressive Alliance dispensation had in April 2012 approved Air India's turnaround plan and a financial restructuring plan, with a committed public funding of Rs 30,231 crore (Rs 302.31 billion), staggered over a period of nine years, with some specific riders.

The seat factor has improved to 73.1 per cent in 2014-15 from 67.9 per cent in FY 15 whereas the network yield stood at Rs 4.35 revenue passenger kilometer in the period as against Rs 3.74 RPKM in fiscal 2011-12.

Besides the number of revenue passengers increased to 16.9 million in FY15 from 13.4 million in FY 12, he said.

The overall network OTP delivered during the previous fiscal stood at 72.7 per cent as against 67.6 per cent in 2011-12, Sharma said.

On the financial performance, besides reducing operating and net loss during the period, the carrier has turned earnings before Interest, Taxes, Depreciation and Amortization positive by Rs 541.6 crore (Rs 5.41 billion) in FY 15 as against a negative EBIDTA of Rs 2,236.95 crore (Rs 22.36 billion) in 2011-12, he said.

The total revenue also rose by 33.25 per cent to Rs 19,781 crore (Rs 197.81 billion) in the last fiscal as compared to Rs 14,713.81 crore (Rs 147.13 billion) in FY12, he added.

There has been, however, a nominal increase in the aircraft maintenance cost, which during 2014-15 stood at Rs 1,145 crore (Rs 11.45 billion) as compared to Rs 830.81 crore (Rs 8.3 billion) on 2011-12, the minister said.

Photograph: Kind courtesy, Boeing