Friday, March 03, 2017

Air India hopes to sustain profitability

Dubai: Air India, which is on a route network expansion mode, hopes to boost operating margins "significantly" this year after making a dramatic turnaround from losses in 2016.

The airline, which for the first time in nearly a decade reported an operating profit of ?1.05 billion in the 2015-16 fiscal year, has been taking various steps such as rationalisation of certain loss-making routes, closure of overseas offline offices at certain locations, phasing out of old fleet and consequential reduction in maintenance costs to sustain profitability.

Pankaj Srivastava, commercial director and board member of Air India, said the main factors that helped to turn around the airline was increased operational efficiency and reduced oil prices. Its fuel bill in 2015-16 dropped by about ?26 billion from a year ago. Fuel cost constituted about 24 per cent of the airline's total cost during 2015-16 compared with 32 per cent of the total cost during the 2015 fiscal year.

Srivastava said in line with its route expansion, the carrier plans to increase domestic and international flights and boost capacity to markets including the Gulf.

In the Gulf, where Air India has a strong operation, the carrier plans to substitute smaller aircraft with larger aircraft. In line with this strategy, Air India launched a Boeing 787 Dreamliner operation between Kochi and Dubai in February, he said. The flight is Air India's second Dreamliner service connecting India and Dubai, as the airline operates a Dreamliner on the Delhi-Dubai route.
03/03/17 Issac John/Khaleej Times