Air India expects to return to profitability in FY2011
Air India expects to return to profitability by reporting an operating profit for the year ending 31-Mar-2011, on the back of a targeted USD452.5 million increase in revenue and as air traffic continues to recover and the carrier’s turnaround programme takes affect (Livemint, 07-Oct-2010). The carrier, which is in the middle of an INR20 billion (USD453 million) government bailout, reported accumulated losses of USD3.2 billion over the past four fiscal years including operating losses of USD1,131 million and USD746.6 million in FY2009 and FY2010, respectively. The carrier also has an accumulated debt of USD4.1 billion. Air India appointed Gustav Baldauf as its new COO to oversee its turnaround programme aimed at cutting losses and repaying debt by FY2015.
*Based on the conversion rate at USD1 = INR44.2
Air India: “Going by the current environment and (if there are) no further drastic hikes in jet fuel prices, Air India will be able to report EBITDA-positive. Moreover, we have already managed to generate additional revenue up to INR.850 crore by August (from April) compared to the corresponding period last year. October to March is traditionally good for airlines in terms of seat occupancy. The seat occupancy level on the international sector rose to 70.7% and 68.4%, respectively in July and August. Only errant jet fuel prices can spoil the party as it continues affecting the bottomline,” Gustav Baldauf, COO. Source: Livemint, 07-Oct-2010.