- Air India reported an operating loss of around Rs. 4,600 crore in the last financial year due to higher oil prices and loss in foreign exchange.
- Giving an account of tough conditions the net loss of the airline is calculated to be Rs, 8,4oo crore while total revenues touched around Rs. 26,400 crore in 2018-19, one of the senior officials told Press Trust of India.
Air India reported an operating loss of around Rs. 4,600 crore in the last financial year due to higher oil prices and loss in foreign exchange. The carrier which is deep in debts is expected to turn operationally profitable in 2019-20.
Giving an account of tough conditions the net loss of the airline is calculated to be Rs, 8,4oo crore while total revenues touched around Rs. 26,400 crore in 2018-19, one of the senior officials told Press Trust of India.
Another senior official from the airline said that is the carrier is expected to project an operating profit of Rs. 700 to 800 crore in 2019-20, given oil prices, don’t shoot up significantly and there is no extreme change in foreign exchange rates.
The airline recorded an operating loss of Rs. 175 to 200 crore in the three months ended June as the closure of Pakistan airspace for Indian carriers impacted the loss and higher costs, which caused a daily loss of Rs. 3 to 4 crore when the restrictions were in the place. Air India lost Rs. 430 crore in the last four-month period when Pakistan closed its airspace after the Balakot strikes for Indian airlines.
The official also mentioned that the load factor and yields are improving for Air India, which currently operates to 41 international and 72 domestic destinations. Load factor is a measure of seat occupancy and yield refers to the average fare paid per passenger.
This situation is expected to improve further as more wide-body airplanes would be available for operations in the coming months. Currently, most of the wide-body aircraft have been grounded by Air India for maintenance and most of them are in the process of being included again into the fleet.
Air India is starting new flights to Toronto from September 27 and to Nairobi in November.
The carrier has a debt burden of more than Rs. 58,000 crore and servicing the loans is a major challenge as the annual outgo is more than Rs. 4,000 crore.
Kapil Kaul, South Asia CEO and Directed, CAPA said this financial condition of Air India is supposed to “significantly improve” in the current financial year.
The improving financial performance will be positive for divestment, Kaul said a fully divested Air India that is well-capitalized and with improved authority and management would ensure that the airline has a relevant future.
The government has decided on disinvestment of Air India as part of efforts to revive its fortunes. Air India has been in the red zone for long, was sanctioned a nearly Rs. 30,000 crore bailout package for a 10-year period by the UPA regime in 2012.
These improving financial conditions seem a positive sign for the carrier and its future, We can hope to events unfold the way they are expected to.