Air India Incurs 246.14 Crore Loss in April-June Quarter

BENGALURU: According to the latest reports, Air India has incurred a loss of 246.14 crore for the April-June quarter. The operating loss has declined from 315.37 during the same period last year, Minister of State for Civil Aviation, Jayant Sinha informed the Lok Sabha. This is the first time in nearly a decade when Air India has reported an operating profit in the last fiscal.

"The target fixed by Air India for operating profit for the first quarter of 2016-17 was 87.28 crore against which the company has posted an operating loss of 246.14 crore," he said in a written reply to the Lok Sabha, as reported by ET. 

According to Sinha, the main reason behind the results was the reduction in revenue yields by around 6 pct over the budgeted target, resulting in decline in passenger revenue. There was also a fall in cargo revenues, which led to the current figures.

Mr. Sinha is also hopeful of a turnaround and expecting to see a profit of 1,086 crore in 2016-17 as operating profit. According to Sinha, the airline has been facing huge problems and losses in the last few years because of a number of factors. The factors include—increase in competition, weakening of the rupee, and liberalized bilateral to foreign airlines.

A number of steps have been taken in order to revitalize Air India. The steps include: a fresh look at certain loss-making routes, closure of certain overseas offline offices, and gradual phasing out of old fleet and reduction in maintenance costs.

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