Around the corner? Air India finally posts profit in December
13 January 2015
After years of accumulated losses, national carrier Air India recorded a net profit of Rs14.6 crore in December, driven by a healthy growth in both passenger and cargo revenue.
The airline's total revenue rose by 6.5 per cent to Rs2,070 crore in December 2014 compared to Rs1,944 crore in the same period of 2013, the airline said.
"AI estimates passenger revenue of Rs16,500 crore during the fiscal 2014-15 and a total revenue of nearly Rs21,500 crore. Together with our subsidiaries, the consolidated revenue is expected to touch Rs25,000 crore for this financial year," a company statement said.
Air India's passenger revenue logged 13.5 per cent growth to Rs1,563 crore in December 2014 compared to Rs1,377 crore in December 2013, resulting in a profit of Rs14.6 crore during the period as against a net loss of Rs168.7 crore the previous year.
The airline's revenue passengers increased by 17.5 per cent to 1.61 million in the reporting period as compared to 1.37 million in December 2013.
Besides, the seat factor also rose to 77.7 per cent from 76.3 per cent in December 2013, with the domestic load factor at a record high of 86 per cent.
According to the Sydney-based aviation think-tank Centre for Asia Pacific Aviation (CAPA) report published last June, the Indian airline industry is expected to post losses of up to Rs8,408 crore in FY15 as against over Rs10,000 crore in the previous year.
The airline's cargo revenue during the reporting month increased to Rs124 crore from Rs115 crore a year-ago period, a 7.5 -per cent growth. At the same time, the company reported EBITDA (earnings before interest, taxes, depreciation, and amortization) of Rs484.2 crore during the period as compared to an EBITDA of Rs308.9 crore.
The operating profit during December 2014 stood at Rs183 crore as compared to Rs2 crore in December 2013, and aircraft utilisation during the period was also significantly higher.
Buoyed by the turnaround in its fortunes, the state-owned airline hopes to raise its market share with a round of fare wars (See: Air India kicks off possible fresh round of fare wars).