Thursday, January 02, 2020

Air India’s int’l revenue soars with some help from Jet closure

New Delhi: The grounding of Jet Airways helped national carrier Air India boost its revenue from international operations by 20% during the first eight months of this financial year, a huge gain considering the single-digit increase during the year-earlier period.
“The increase in numbers is despite the closure of Pakistani airspace, which impacted not only our international operations but that of all carriers using that route,” said a senior Air India official who did not want to be identified.
Pakistan closed its airspace on February 26 last year in the wake of IAF fighter jets striking a Jaish-e-Mohammed terrorist training camp in Balakot. The closure was lifted in mid-July and Indian carriers lost an estimated over Rs 700 crore, of which Rs 400 crore was by Air India alone.
Jet Airways, which was grounded in April last year, had the biggest international network among Indian carriers and its closure helped Air India fill its planes and add revenue.
The national carrier, however, could not cash in on Jet’s absence in the domestic market due to competition from Vistara and IndiGo. Domestic revenue climbed 10%, in line with growth last year.
Air India’s total revenue from both international and domestic passengers rose 16.4% to Rs 15,056 crore during the April-November 2019 period from Rs 12,936 crore a year earlier. While revenue from international flights rose 19.9% to Rs 9,859 crore from Rs 8,220 crore, domestic revenue rose by 10% to Rs 5,197 crore.
On the back of the higher revenue, Air India also turned Ebitdapositive with earnings of ?177 crore compared with a loss of ?535 crore a year earlier.
The improvement in Air India’s key indicators comes as the government prepares to sell Air India after a failed attempt in 2018, when the airline did not receive any bids.
The government is being cautious this time and has offered 100% stake in the airline, substantial restructuring of debt and liabilities and freedom to the new owner to allow voluntarily retirement for employees.
02/01/20 Mihir Mishra/Economic Times
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