Monday, September 21, 2020

Only 21 Air India routes are profitable, says minister

The beleaguered national carrier Air India’s 21 routes, including nine domestic and 12 international, meet the total cost of operating flights out of 100 routes

where the airline operated between April 2019 and March 2020, Civil Aviation Minister Hardeep Singh Puri revealed in a written reply in Parliament.

Puri was replying to a question by All India Trinamool Congress’ Dibyendru Adhikari in the Lok Sabha. The MP from Tamluk sought to know if Air India

analyses which routes are making profits and losses, and whether smaller aircraft should be deployed on loss-making routes.

Puri’s reply revealed that Air India operates in 56 domestic and 44 international destinations, and out of these 101 domestic routes and 10 international routes

do not meet the variable cost. He said 83 domestic routes and 11 international routes met the variable cost, but did not meet the EBITDAR cost.

EBITDAR stands for earnings before interest, taxation, depreciation, amortisation and rentals (EBITDAR) and is commonly used in the airline sector as a

metric of operational performance before aircraft rent and ownership costs which may vary.

Puri said 38 domestic routes and 41 international routes met the EDITDAR costs, but not the earning before interest and tax (EBIT) cost, and 11domestic

routes and 24 international routes met the EBIT cost but not the total cost.

EBIT is a company's net income before tax and is used to analyse the performance of a company's core operations without the costs of the capital structure

and tax expenses impacting profit. Only 9 domestic routes and 12 international routes met the total cost, he said.

“Air India continuously monitors the market developments and performance of its flights and carries out studies with the objective to withdraw, to introduce new

routes or increase/decrease frequency on existing routes. Air India has withdrawn flights that were not meeting their fixed/variable costs,” Puri said.

21/09/20 Satish Nandgaonkar/Mumbai Mirror

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