“We are considering alternatives to strengthen its finances. AI’s domestic share fell as it did not add equipment quickly while the market was growing. Now that their finances will be shored up, they will add equipment and gain market share. The strategy for AI is to have a strong...
domestic network with the hub currently in Delhi from where it will have direct flights to global business hubs and cities,” Aviation Minister Jayant Sinha has said.
The government recently has approved Air India’s plan to add more planes to its fleet, that may see its just over 100 aircraft fleet double in next three to four years.
“Air India will be a robust global airline. Its domestic market share fell as it did not add capacity while others did. The airline will get more planes and it will soon have a very strong domestic network with hub in Delhi,” Sinha said.
The Centre’s decision came after Air India has reported an operating profit of Rs.105 crore, for the first time in a decade, in the last fiscal aided by lower fuel costs and rise in passenger numbers. 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. A decline of nearly 31 percent in fuel costs in the last financial year compared to the year-ago period was a key factor in the airline becoming operationally profitable.
Earlier, for the first time since the merger of Air India and Indian Airlines in 2007, the national airline has posted an operating profit of Rs 105 crore in FY 2015-16 as costs have come down due to a fall in oil prices and because of increase in passenger revenue owing to sharp rise in domestic air travel. The Air India had posted an operating loss of Rs 2,636 crore in fiscal 2014-15. In 2015-16, the Air India revenue fell to Rs 20,526 crore from Rs 20,613 crore in 2014-15.
"It is not correct to say that our operating profit came due to fall in oil prices alone. Of course, that has helped but we have focussed on adding routes, enhancing network and improving services to attract passengers. Aircraft utilisation has gone up. All these factors, including oil, helped us report the profit," said an official.