Wednesday, March 16, 2016

Flying high: Air India expects Rs 8 cr operating profit this fiscal: Minister

MR Turnaround has done it again. With substantial improvement, Air India is expected to post an operating profit of Rs. 8 crore in the current fiscal, the government said on March 15. It may be mentioned that Ever since Lohani took charge on August 20 as the chairman and managing director (CMD) of ailing national carrier for three years, the Maharaja seems to be flying...
high again. Lohani is also credited with the turnaround of the ITDC post-disinvestment in 2001-02.
This would also be the first time since the merger of Air India and Indian Airlines that the national carrier would be reporting an operating profit.
Minister of State for Civil Aviation Mahesh Sharma told Rajya Sabha that Air India is expected to “post substantial improvements” as per the revised estimates of 2015-16 compared to the previous financial year. “Air India is expected to earn operating profit of Rs. 8 crore as compared to the operating loss of Rs. 2,636.18 crore in the previous year. This is the first time that the company is going to achieve operating profit since its merger in 2007-08,” he said in a written reply.
The airline expects to shave off its losses by around 40 per cent to Rs. 3,529.80 crore this fiscal.
It was provided Rs. 30,231 crore lifeline by the government in 2012 under a turnaround plan stretching over a period of nine years to keep it afloat.
To a separate query, Mr. Sharma said Air India provides lifetime free air travel pass to Bharat Ratna awardees and living members of the Constituent Assembly of India, among others.
With regard to a question related to Mumbai airport, the minister said assistance has been sought from International Civil Aviation Organisation (ICAO) to find out a feasible solution for development of area around the airport “without compromising with the safety, regularity and efficiency of aircraft operations”. On whether the Centre has received any proposal from Maharashtra government in granting approval to construct towers of 90 metre height at Bandra-Kurla complex and 225 metre one at Wadala, he replied in the affirmative.
“Concurrence of the government in this matter depends on the outcome of the ICAO study,” he noted.
Ashwani Lohani, who can “handle sick companies and turn them around” is “a highly decorated officer who is also known as Mr. Turnaround.”
Lohani's appointment came at a crucial juncture when the government is trying hard to bail out the ailing Air India from its financial mess and put it on the road to profitability.
Air India is at present surviving on a Rs.30,000-crore bailout package approved in April 2012 under a Turnaround Plan/Financial Restructuring Plan. Air India reported a net loss of Rs.5,547.47 crore in 2014-15 with total revenues touching Rs.19,781 crore. The loss was bigger than in the previous fiscal but the airline managed to reduce it from the 2012-13 figure of Rs.7,559.74 crore. Air India’s financial performance during 2014-15 fell well short of its internal estimates, which had pegged the net loss at Rs.4,346 crore and revenues around Rs.21,290 crore. Air India’s total debt is Rs.50,000 crore and its combined losses stand at a whopping Rs.30,000 crore.

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