Operating costs, lower revenues for 2006-07 push Air India $113mn in the red

Air India has suffered a net loss of $113 million in the financial year 2006-07, mainly on account of higher operating costs and lower revenues. The loss compares with a net profit of $4.11 million, which the carrier had reported the previous year.

According to airline officials the major heads where expenses shot up were fuel, which accounted for about 35 per cent of the operating costs. Fuel costs increased by $97.41 million or 12 per cent, even as revenues fell by $83 million.

An additional burden was the payment of $107.25 million made by the carrier on account of wage arrears.

Interest costs on working capital increased by $39.11 million to $60.31 million. The carrier also found it paying $50.47 million on long-term borrowings made to fund its fleet acquisition.