India’s national airline, Air India, has ‘operationally’ turned around, Prime Minister Narendra Modi said on the occasion of India’s 70th Independence Day. Last month, the Minister of State for Civil Aviation Jayant Sinha said, in a reply to the Lok Sabha, that the airline is expected to post a modest operating profit, based on provisional results for financial year 2015-16.
But is the operational profit due to operational efficiency or the benefit of lower fuel prices, is a question that has been raised by both industry experts and rating agencies.
Air India Ltd. was incorporated as National Aviation Company of India Ltd (NACIL) on March 30, 2007, to merge the operations of the erstwhile Air India and Indian Airlines. NACIL was renamed Air India Ltd. on October 26, 2010. The merged airline has been making losses since its inception. In fact, the year preceding the merger, both airlines had a combined loss of around Rs 688 crore, the then Aviation Minister Mahesh Sharma said in response to a question raised in the Lok Sabha.
19/08/16 Sajeet Manghat/Bloomberg
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But is the operational profit due to operational efficiency or the benefit of lower fuel prices, is a question that has been raised by both industry experts and rating agencies.
Air India Ltd. was incorporated as National Aviation Company of India Ltd (NACIL) on March 30, 2007, to merge the operations of the erstwhile Air India and Indian Airlines. NACIL was renamed Air India Ltd. on October 26, 2010. The merged airline has been making losses since its inception. In fact, the year preceding the merger, both airlines had a combined loss of around Rs 688 crore, the then Aviation Minister Mahesh Sharma said in response to a question raised in the Lok Sabha.
19/08/16 Sajeet Manghat/Bloomberg
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