BackAir India prepares to fly its grounded Dreamliners in May
Expectations of an `1,040 cr operating profit this fiscal made assuming Dreamliners will join fleet by May
Premium(Ramesh Pathania/Mint)
Mumbai: Air India Ltd is preparing to fly its six grounded Boeing 787 Dreamliners in May after airplane maker Boeing Co. conducted the final certification flight for a new battery system on 5 April, clearing a test that was set for it by the US Federal Aviation Administration (FAA).
India’s national airline had initially expected to fly the Dreamliner aircraft in April, but it now expects to do so in May, two senior Air India officials said on Monday.
In January, Air India had grounded the six Dreamliners after being ordered to do so by the country’s civil aviation regulator, Directorate General of Civil Aviation. Regulators and airlines in Europe and South America grounded the plane, which was first pulled from schedules in Japan in mid-January following an emergency landing after instruments indicated a battery error.
On 5 April, Boeing said the crew of the company’s demonstration flight reported that the flight was uneventful. Boeing will now file necessary documents with FAA to obtain clearances to restart 787 flights. The fuel-efficient 787, which uses weight-saving composite materials, is a critical element of debt-laden Air India’s turnaround plan.
Air India officials said the return of the Dreamliners will help the airline during the peak May-to-August season.
Dreamliners would be re-introduced in sectors, including Delhi-Dubai, Delhi-Frankfurt, Delhi-Paris and will induct on Delhi-London route, the official said.
Air India expects to post an operating profit of ₹ 1,040 crore in the current fiscal. Operating revenue is estimated to increase by ₹ 3,235 crore and seat occupancy factor by 24%.
Total revenue for this fiscal year has been budgeted at ₹ 19,393 crore—an increase of 20% over the previous year.
“All these estimates are made assuming that Dreamliners would be joining the fleet by May," the official said.
The state-owned airline is expected to report a loss of ₹ 5,198 crore in the year ended 31 March compared with a loss of ₹ 7,559 crore in the previous year. The loss in the current fiscal is expected to narrow to ₹ 3,900 crore. In mid-March, Union civil aviation minister Ajit Singh said that despite the grounding of Dreamliners, Air India would be able to post a positive Ebitda (earnings before interest, taxes, depreciation, and amortization) of ₹ 20 crore in the year ended 31 March. Singh had earlier said that Air India was hoping to get the Dreamliners back in April. In April, the government approved a ₹ 30,000 crore package to bail out the money-losing airline. This includes an upfront equity infusion of ₹ 6,750 crore and assured equity support of ₹ 23,481 crore till 2020-21. The airline has ₹ 47,226 crore debt as on 31 July.
According to Bharath Mahadevan, who until recently was regional manager for north-east Asia at Jet Airways (India) Ltd, the life of Air India won’t change dramatically with the return of Dreamliners.
“It is just a fuel efficient aircraft type that will improve the dynamics of the routes it operates on, but till they get their overall act together both in terms of costs as well as strategy for improving revenues (eg; building India as a hub to rival Dubai and Singapore), nothing will change," Mahadevan added.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
