New Delhi: For the first time in a decade, Air India has reported an operating profit of Rs105 crore in the last fiscal, aided by lower fuel costs and rise in passenger numbers. The state-owned airline, which is working on ways to improve its financials, had an operating loss of Rs2,636 crore in 2014-15.
During its meeting on Friday, the Air India board approved the financial numbers for 2015-16 and the carrier has reported an operating profit of Rs105 crore, people familiar with the matter said.
This is the first time since 2007—when the erstwhile Indian Airlines was merged with Air India—that the national carrier has eked out an operating profit. Having an operating profit in a decade is an encouraging sign for the airline, which is seeking to turn around its fortunes amid stiff competition, people familiar with the matter said.
A decline of nearly 24% in fuel costs in the last financial year compared to the year-ago period was a key factor in the airline becoming operationally profitable. According to people aware of the matter, the benefits of lower fuel costs were passed on to passengers, which is also reflected in terms of lower yield during the last fiscal.
Yield—an indicator of ticket prices—declined by 7.7%. In 2015-16, Air India carried 18 million passengers, registering a growth of 6.6%. In the comparable period, the same stood at 16.88 million, they added.
However, in 2015-16, the carrier saw its revenue slide to Rs20,526 crore from Rs20,613 crore in 2014-15. Indicating improved operating performance, Ebitdar (earnings before interest, tax, depreciation, amortisation and rentals) rose to Rs3,587 crore last financial year, from Rs1,436 crore in 2014-15.
Last fiscal, the airline’s capacity deployment and aircraft utilization went up by 4.8% and 7.5%, respectively. On account of currency fluctuations, the carrier incurred a forex loss Rs350 crore in 2015-16. Air India is staying afloat on a Rs30,000-crore bailout extended by the government.