New Delhi: Air India’s net loss after tax narrowed to Rs3,643 crore and operating profit rose to Rs300 crore in 2016-17, the government said on Tuesday.
The airline saw its total revenue, including exceptional and extraordinary items, increase to Rs22,146 crore in 2016-17 period, as per provisional numbers provided by minister of state for civil aviation Jayant Sinha to the Rajya Sabha. The total revenue stood at Rs20,524.56 crore in the year-ago period.
The financial position seems to have improved for the airline as it had posted a net loss after tax of Rs3,836.77 crore and an operating profit of Rs105 crore in 2015-16 fiscal. However, the airline’s expenditure went up to Rs25,789 crore in the last financial year, as per the provisional numbers. In 2015-16, the same was lower at Rs24,361.33 crore.
Against the backdrop of the Cabinet Committee on Economic Affairs (CCEA) last month giving its in-principle approval for Air India’s strategic disinvestment, Sinha on Tuesday responded to various queries related to the airline by way of written replies to the Rajya Sabha.
Citing provisional figures, Sinha said Air India’s total debt stood at Rs48,876.81 crore at the end of March 2017. “Air India is facing financial pressure and earning less profit due to high debt burden as an offshoot of past accumulated losses. The debt servicing is at around Rs6,000 crore per annum," the minister said.
To a query on whether Air India is facing financial pressure due to laxity in operation and management of the airline, Sinha replied in the negative. “To implement the decision of the CCEA, appointment of transaction adviser, legal adviser and asset valuer shall be taken up as per terms and conditions and scope of work of advisers/ valuer in accordance with the model RFPs (Request for Proposals) suggested by the Department of Investment and Public Asset Management," Sinha said.
Noting that liquidity constraints continue to impact the airline’s smooth functioning, he said the company has been making constant efforts for substituting its high cost working capital loans with long term low cost debt. “Air India has been in consultation with various banks so that the interest costs can come down substantially in the coming years to improve its profits," the minister added.
According to Sinha, the number of contractual staff of Air India increased in operational categories in the last one year. As per the figures, the number of contractual staff rose to 2,636 as on 1 April 2017 compared to 1,740 at the same period a year ago.
The national carrier also benefited from the ban imposed by the US, in March, on carrying of large electronic devices as hand baggage on flights from some Gulf countries. Earlier this month, the US revoked the curbs on airlines flying from some of these airports. “The ban had limited, transient beneficial impact on Air India’s passenger revenues," Sinha said in a written reply.