Air India may post operating profit this year

State-run Air India, in the midst of a Rs.2,000 crore government bailout, could turn the corner in the year ending March by posting an operating profit as air traffic continues to revive and changes that have been implemented by the national carrier start taking effect.
The airline is expected to turn Ebitda (earnings before interest, tax, depreciation and amortization) positive in the current fiscal, according to a senior Air India executive and a top official at the ministry of civil aviation, both of whom spoke on condition of anonymity.
They said it will also achieve the target of a Rs.2,000 crore jump in revenue, but may fall short by half of a targeted Rs.2,000 crore through cost cuts.
Air India posted an operating loss of Rs.5,000 crore and Rs.3,300 crore in 2008-09 and 2009-10, respectively.
The airline has losses of Rs.14,000 crore accumulated over the last four fiscal years and debt of Rs.18,000 crore.
In late July, Air India embarked on a turnaround programme aimed at wiping out losses and repaying debt by 2014-15. The carrier also hired Gustav Baldauf as chief operating officer to oversee the turnaround, for the first time the state-owned carrier has appointed a foreigner in a senior position. Air India has about 150 planes, which makes it the airline with the largest fleet in India. In terms of passengers carried, the airline is third after Jet Airways (India) Ltd and Kingfisher Airlines Ltd.
07/10/10 P.R. Sanjai/Live Mint

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Categories: NACIL Oct 2010