Published 15:57 IST, September 15th 2019
Air India reports Rs 4,600 crore loss for financial year 2018-2019
Air India posted an operating loss of around Rs 4,600 crore in financial year 2018-19, mainly due to higher oil prices and foreign exchange losses.
- India News
- 3 min read
Air India posted an operating loss of around Rs 4,600 crore in the last financial year mainly due to higher oil prices and foreign exchange losses but the debt-laden carrier expects to turn operationally profitable in 2019-20, according to senior officials.
Reflecting tough business conditions, the airline's net loss stood at about Rs 8,400 crore while total revenues touched around Rs 26,400 crore in 2018-19, one of the senior officials told PTI. Another senior official said the airline is projected to post an operating profit of Rs 700 to 800 crore in 2019-20, provided oil prices do not shoot up significantly and there is no steep fluctuation in foreign exchange rates. However, the airline incurred an operating loss of Rs 175 to 200 crore in the three months ended June as the closure of Pakistan airspace for Indian carriers resulted in higher costs and caused a daily loss of Rs 3 to 4 crore when the restrictions were in place, the official said.
READ | Air India plans to bring all 17 grounded aircraft back into operation by October-end: Ashwani Lohani
Rs 430 crore loss after Pakistan shuts its airspace
Air India had a loss of Rs 430 crore in the four-month period when Pakistan closed its airspace after the Balakot airstrikes. The official noted that load factor and yields are improving for Air India, which currently flies to 41 international and 72 domestic destinations.
The load factor is a measure of seat occupancy and yield refers to the average fare paid per passenger. The situation is anticipated to improve further as more wide-body planes would be available for operations in the coming months, the official added.
Rs 58,000 crore debt burden for Air India
Air India had grounded several of its wide-body aircraft for maintenance and most of them are in the process of being re-inducted into the fleet. Air India is to start flying to Toronto from September 27 and to Nairobi in November. The airline has a debt burden of more than Rs 58,000 crore and servicing the loans is a major challenge as the annual outgo is more than Rs 4,000 crore.
The official who was quoted first said the carrier is facing a financial crisis and disinvestment is the option. Aviation consultancy CAPA South Asia CEO and Director Kapil Kaul said Air India's financial position is likely to "significantly improve" in the current financial year. "CAPA expects closer to break-even in FY 20 excluding increased costs incurred due to closure of Pakistan airspace.
Updated 17:26 IST, September 15th 2019